Contact: Jane Jankowski
Phone: 317/232-1622

For Immediate Release: Oct 6, 2005
First quarter revenue projections flat

INDIANAPOLIS (October 6, 2005) ? First quarter revenue projections for Fiscal Year 2006 are essentially flat, according to the quarterly revenue report released today by the Office of Management and Budget (OMB).

First quarter general fund and property tax replacement fund revenues exceeded forecasted revenues by less than 1 percent or $13.3 million. Sales tax revenue was consistently on target, exceeding forecast by $7.5 million or 0.6 percent.

Individual income tax revenue was significantly below forecast by $72.7 million or 6.9 percent.

?The lag in individual income tax revenues occurred primarily in September when numbers were $44 million below plan. We believe it is caused by a relatively higher level of refunds,? said Charles Schalliol, OMB director.

Corporate income tax revenue was up $57.9 million or 36.1 percent; gaming revenue exceeded the forecast two of the three months but finished below the quarter?s forecast by $5.7 million or 7.6 percent.

September numbers were slightly less positive with overall general fund and property tax replacement fund revenues in at $4 million below plan.

?I remain cautious about revenue performance in the next few months. We don?t know yet what impact higher gasoline and energy costs will have on revenue, but we do not believe the full impact has been felt.?

Schalliol said early returns from Governor Daniels? tax amnesty program are encouraging. More than $15 million had been received in the first two weeks of the program. The program extends through November 15.

Compared to the first quarter of Fiscal Year 2005, general fund and property tax replacement fund revenues grew by 4.7 percent or $125.5 million, led by sales tax and corporate income tax revenue. First quarter sales tax revenue exceeded the first quarter of the previous year by $59.2 million or 4.7 percent, and corporate income tax revenue exceeded the prior year by $60.7 million or 38.6 percent. First quarter individual income tax revenue was slightly below last year?s revenue; however, employee withholdings grew by 4.9 percent. The growth in employee withholding was overshadowed by an increased amount of tax refunds.

The complete quarterly report is posted at