Upcoming state revenue forecast could shine light on tax cut debate
Indiana lawmakers will debate whether to cut taxes during the upcoming 2022 legislative session. And a state revenue forecast unveiled next week will likely play a major role in that discussion.
Through the first five months of the current fiscal year, Indiana has collected $647 million more than the state budget needs. And that’s on the heels of the last fiscal year, when the state generated budget reserves of nearly $4 billion, triggering an automatic taxpayer refund.
Those lofty revenues have lawmakers contemplating permanent tax cuts. Senate Republican leaders have expressed some hesitance to do so in 2022. They point out that a huge influx of federal funds over the last year or so make it harder to predict when state tax revenues will settle back to normal.
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A new state revenue forecast might provide more clarity to that question. The projections unveiled Thursday will reveal how much money lawmakers should expect the state to collect in the current budget cycle. And if that forecast is particularly rosy, a tax cut could be coming soon.