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IN budget surplus triggers taxpayer refund

Governor Mitch Daniels says Hoosiers could see next year’s tax bills reduced by more than $100 per taxpayer.

Indiana’s automatic taxpayer refund kicks in when the state’s budget surplus exceeds an amount equal to 10% of the total state budget.  Though the fiscal year, which ended Sunday, won’t be officially closed-out for several days, Governor Daniels says estimates show the state will likely have reserves of more than $2 billion.  That would send at least $300 million back to taxpayers, with another $300 million earmarked for some of the state’s pension funds.  People won’t get a check in the mail. Instead, they’ll see at least $100 taken off next year’s tax returns.

Daniels says the state’s financial picture will leave the next governor and General Assembly in a strong position.

“They’ll have flexibility to invest, to spend, to cut taxes, some mix of all of those.”

Part of the state’s surplus is built on the backs of state agencies, which are required to send back a percentage of their budgets to the general fund every year.  During the recession, those reversion requirements were as high as 20% for some agencies.  More recently, the targets have typically been around three percent.

Daniels says the reversions are meant as a way to make government more efficient. Even though the state’s fiscal health is strong, according to the Daniels administration, he stills wants agencies to trim where possible.

“Because this national economy continues to struggle and could plummet again for all we know, our first job has always been to protect Hoosiers.”

Daniels says continuing to pad the state’s reserves helps protect against things like government service cuts and significant tax increases.

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.