I just received the Senate Fiscal Update of October 8,2009, and thought I should pass it along to the readers. Here goes. The actual general fund revenue collections for July 1 through September 30 which is the first quarter of the FY 2010 totaled $2,852.8 million whis is $473.9 million (14% less) than was collected for the same quarter for 2009.
Collections for September missed the target revenue by $165.8 million. Revenues had already missed monthly targets for July and August by a combined $88.2 million so for the July 1 through September 30 first quarter of Fiscal year 2010 actual revenues missed target by a total of $254.1 million.
These numbers reflect continued drops in income tax and sales tax collections. For the first quarter individual income tax revenue fell short of the predicted target by $158.5 million and Corporate Income taxes fell short by $57.6 million and on top of that, as could be predicted, sales declined and sales tax collections fell short of the projected amount by $71.2 million. Gaming and other taxes actually ran ahead of predicted income by $33.3 million.
The report went on to say that even if these declines stopped today and leveled off and started meeting our target it would mean the State's Combined Balances would fall short by $750 million by the end of the biennium. If on the other hand revenue intake continues to decline we will face severe consequences.
The General Assembly, like all the governors in the recent memory, has given our current governor the tools and the authority to manage the State Budget. These tools include withholding allotments of appropriated funds. Deep spending cuts may be necessary. Already many cuts have taken place like delaying capital improvement spending and freezing state employee pay.
From my personal note I would remind the citizens that we are fortunate to have a billion dollar surplus but that won't last long. That sum would only run the state for about 4 or so weeks depending on the cuts that are made, thus the Governor will be faced with a monumental and emotional task of having to decide where and what to trim. Assuming for the sake or argument, that the recession is in fact over, all experts predict that Indiana will not see the rebound for anywhere from two to three years. We live in perilous times and so much of what can dramatically effect our economy lies outside our control. It doesn't take much imagination to envision what would happen if Israel has to make a strike on Iran's atomic bomb development sites. If the Middle East caves in on itself, oil will go off the chart or China could convince the rest of the world to switch from the dollar to the Chinese Yuan as the international currency to be used in the pricing of oil. For those who have certain areas that receive state funding just remember, every dollar, every dime, every penny, has to come from some worker or some business. While the Indiana legislature does everything we can to try to make Indiana a state where others will want to move and do business and provide a positive environment for those already in business in our state, many of the cards that are dealt to us come from some other deck of cards in Washington and not all the cards come from the top of the deck.
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