Don’t get us wrong. It’s not that we’re not grateful, or will be come tax time.
After all, who doesn’t like an extra hundred bucks?
Earlier this week, Indiana Gov. Mitch Daniel said he expects the state to conclude its most recent budget with around $2 billion in cash reserves. Of that amount, $300 million is set aside for pension costs for teachers hired before 1996. Another $300 million will be credited to Hoosier taxpayers next year — $100 for single filers and $200 for joint filers.
The refund comes courtesy of a state law, passed in 2011, requiring taxpayers to be reimbursed when the state budget surplus hits a certain target.
Next year’s automatic refund will be the first in Indiana’s history, but it’s not a revolutionary concept. Simply put, tax dollars are our money. Why shouldn’t some of that money be returned to the average Hoosier? One hundred dollars may not sound like a lot, but $300 million churning in the private sector is no dull economic spur.
According to The Associated Press, Indiana is enjoying bountiful cash reserves due to three big factors. These include improved tax collections by state officials as the recession recedes, funding cuts to state agencies, and a goof resulting in officials finding $320 million in a tax collection account.
Good news? Lucky breaks? Perhaps. Still, the very factors that led to the reserves give this newspaper pause.
The recession springs to mind. While touting a stronger Hoosier economy, Daniels himself said the U.S. economy “continues to struggle and could plummet again for all we know.”
Indiana, recall, was not spared when the national economy plummeted the first time around. Cash reserves offer a degree of protection against catastrophe, and $300 million could add to the cushion.
Also consider the phrase “funding cuts to stage agencies.” It sounds broad and remote, unless you work at an impacted agency or are one of the people it serves. Some agencies likely had budgetary fat in need of trimming. No doubt some deserving Hoosiers, through no fault of their own, are feeling the cuts at a personal level.
Lastly, it’s tempting to view state officials’ discovery of $320 million as a happy event bordering on the comic. Recall, too, the error that kept $206 million from Indiana counties?
Accounting errors don’t always yield unexpected windfalls, though. And the two big mistakes we cited have us a tad skeptical about rosy reports on Indiana’s financial health.
On behalf of Hoosier taxpayers, we say thanks to Gov. Daniels and the state Legislature. We anticipate the refund. We also wonder if it’s money well spent.
Opinion
Is tax refund the best move for Indiana?
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