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Bleak Sales Tax Outlook Lowers State Forecast by 175 Million

Nic McPhee

A new revenue forecast unveiled Thursday by state fiscal analysts predicts Indiana will collect $175 million less in tax revenue over the next two years than previously expected.  

The new revenue forecast includes optimistic expectations for individual income taxes – $217 million more in 2016 and 2017 than predicted in the last forecast.  But the outlook is significantly bleaker for sales taxes – more than $300 million less than previous projections.  Senate Appropriations Chair Luke Kenley says the conservative forecast likely means that the General Assembly may only be able to enact short-term road funding solutions in the upcoming 2016 session.

“But I think in terms of moving forward with a really aggressive plan, we kind of need to get to that 2017 budget and see what we have available there," Kenley adds.

House Ways and Means Chair Tim Brown agrees that people won’t want to make long-term decisions until 2017…but says his caucus will push forward with a comprehensive proposal anyway -- "We want to have the discussion because it's such an important issue."

The legislative session begins January 5th.  

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