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Dec
2011
7

Indiana Discovers $300 Million It Didn’t Know It Had, Dems Wonder Aloud If Recent Cuts Were Needed

An apparent accounting programming error has led to the discovery that Indiana is $300 million richer than it thought.

From The Indy Star:

In the equivalent of finding money in the pocket of the winter coat you hadn’t put on in months, the state has discovered it has nearly $300 million more than it thought to put into the general fund.

Gov. Mitch Daniels said an auditor for the State Department of Revenue discovered that some corporate taxes, being paid by electronic check, had been sitting in an account and, because of a programming error, had not been properly attributed to the state general fund. The checks had been cashed, the money was earning interest and the state knew it had the money; it just wasn’t added in to the state’s main checking account total.

It is certainly believable that either human or computer error could have caused this. It is also understandable that people would be displeased despite the obvious positives of finding $300 million. Daniels’ detractors weighed in:

Senate Minority Leader Vi Simpson, D-Ellettsville, noted that in the past few years the governor has cut public school funding by $300 million from what the legislature appropriated, as the sour economy shrunk state revenues. Those cuts resulted in some districts in layoffs and program cuts.

“What a coincidence!” Simpson said in a statement. “The governor suddenly found $300 million in misplaced state dollars. This wasn’t just an accounting error. Children got hurt by this, families have suffered. And all of it could have been avoided.”

The Governor is leaning toward using the funds to create a small tax refund for Indianans. Though small, triggering a tax refund also comes with a teacher-friendly component, too:

If reserves equal more than 10 percent of the ensuing year’s budget, half of anything over that 10 percent is split, with half going to pay for teachers’ pensions and half returned to taxpayers..

But Democrats have a more tangible, broad vision for how the money could positively impact the state’s education environment:

Democrats have called instead for getting more meaningful money back into the pockets of working people through such things as a sales tax holiday for school supply purchases and a state tax credit for child care, along with more money for education.

Read the whole article HERE.

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