Indiana’s August revenues rolled in stronger than expected, giving state budget writers a little extra breathing room as we head into the fall. According to the latest numbers, the General Fund pulled in just over $1.56 billion. That’s about $60 million more than forecasted, and nearly $137 million ahead of last August.
The heavy hitters? Sales tax and individual income tax. Sales tax collections came in at $951 million, up nearly 4 percent from projections and 7 percent over last year. Translation: Hoosiers are still out shopping, dining, and spending. Individual income tax brought in $488 million, up 3 percent from forecast and almost 10 percent higher than a year ago. In other words, wages are holding steady, and withholding is strong.
Not every category was a winner. Corporate income tax was a rounding error at $3.5 million—down more than half from expectations. But that’s more about timing than trouble, since the real action for corporate receipts shows up in September, December, April, and June.
One line item that did raise eyebrows: cigarette taxes. They surged to $50 million, which is a whopping 177 percent increase from last year. No, Hoosiers didn’t suddenly pick up smoking en masse. That bump came from a policy change in this year’s budget bill. In other words, it’s smoke and mirrors—policy, not puffing.
Year-to-date, Indiana has collected just over $3.16 billion, running about 2.5 percent ahead of plan and 7.4 percent better than the same point last year. The takeaway? We’re off to a solid start in the new fiscal year, but the real test will come in the big months when quarterly corporate payments and annual tax filings hit the books.
For now, state officials can exhale—just maybe not around those cigarette receipts.
