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IN Dept. Revenue mistake discovered, $206 million owed to counties

Millions of dollars in income tax revenue has been withheld from counties because of another programming error at the state Department of Revenue.  As a result, the head of the Department of Revenue is stepping down.

Roughly $206 million of Local Option Income Tax funds were supposed to be distributed to Indiana counties since January of 2011, but were incorrectly stored in the state’s General Fund.  That comes after the state announced only four months ago more than $300 million in corporate tax revenue was mistakenly withheld from the General Fund.

Budget Director Adam Horst says a review of the revenue department was conducted after the corporate tax error and uncovered this latest mistake.

“The governor also directed me to continue the ongoing review by the Office of Management and Budget and to also to hire a firm to conduct a third-party, independent audit of the Department of Revenue.”

Two senior officials at the Department of Revenue have left their jobs and Commissioner John Eckart offered his resignation.  Eckart will stay on to help transition to a new leader.

Horst says while the error is unfortunate, the state is acting quickly to rectify the situation by repaying counties what they’re owed.

“The good news from them from a budgetary perspective is they’re going to receive 206 million dollars plus interest within the next few days.”

Horst adds that taking the money out of the General Fund shouldn’t significantly alter the taxpayer refund expected at the end of this fiscal year.

The mayors of Lafayette and West Lafayette say the news of the "found" money is both encouraging and discouraging.

Lafayette Mayor Tony Roswarski says the downside is the city had to make cuts and hold off on some expenditures, not knowing this money was available.  However, he says it also means an extra financial boost cities, such as Lafayette, weren’t expecting.

West Lafayette Mayor John Dennis echoes those sentiments. He says the money will help the city with projects it may not have been able to do otherwise.

The list below shows the amount of income tax revenue being distributed to Tippecanoe and surrounding counties:

Benton - CEDIT: $73,302.31  &  CAGIT: $494,047.97

Carroll - CEDIT: $103,707.56  &  CAGIT: $993,570.22

Cass - CEDIT: $178,425.32  &  CAGIT: $1,612,829.36

Clinton - CEDIT: $306,361.76  &  CAGIT: $850,199.00

Fountain - CEDIT: $49,100.08  &  CAGIT: $488,785.32

Montgomery - COIT: $1,835,782.89  &  CEDIT: $93,735.36

Tippecanoe - COIT: $2,618,796.72  &  CEDIT: $2,193,386.00

Warren - CEDIT: $89,242.04  &  CAGIT: $497,824.96

White - CEDIT: $245,850.19  &  CAGIT: $761,907.21

A list of all 91 counties receiving funds is HERE.

Brandon Smith is excited to be working for public radio in Indiana. He has previously worked in public radio as a reporter and anchor in mid-Missouri for KBIA Radio out of Columbia. Prior to that, he worked for WSPY Radio in Plano, Illinois as a show host, reporter, producer and anchor. His first job in radio was in another state capitol, in Jefferson City, Missouri, as a reporter for three radio stations around Missouri. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.