To quote Newton’s Second Law of Gravity: “What goes up must come down,” and that unfortunately has happened with the revenue forecast numbers reported for the month of October.
Overall revenues collected were $134.7 million below forecast and after three months of relatively moderately-above forecast collections, state revenues are now unfortunately $69.2 million below forecast estimates.
With eight months remaining in this fiscal year, it is possible that state revenues will recover, and the state may end the fiscal year at or above forecast because, as many in the revenue forecasting field say, “One month does not make a forecast.”
However, last month’s dismal collections should serve as a sobering wake-up call to the Indiana General Assembly for two primary reasons.
First, I consistently warned the General Assembly to be careful when it comes to the impact of Senate Bill 2 on our revenue stream earlier this year during the legislative session. Senate Bill 2, again, was a bill to help Indiana small business owners calculate their taxes in a manner that helped them save money on their federal taxes. No one questioned the importance of allowing this methodology to be used by Hoosiers since other states were doing the...