Millions less for cities and counties across Indiana as state miscalculates tax revenues

Downtown Indianapolis skyline (WTHR file photo)

INDIANAPOLIS (WTHR) - Indianapolis and other cities and counties across Indiana will begin their 2019 budget process with millions of dollars less than originally thought.

That's because county income tax collections are lower than forecast.

Jason Dudich, Director of the State Budget Agency (SBA), which released its estimates June 1st, said tax revenues were off by $69.2 million.

Word from the SBA comes as Indianapolis Mayor Joe Hogsett prepares to introduce his 2019 budget Monday night to the City County Council.

The revised numbers mean Indianapolis alone will get $10 million less than it expected.

Asked about the estimates, Fady Qaddoura, the city's Controller and Chief Financial Officer said in an email:

"The Office of Finance and Management works closely with the state to confirm income tax projections and build the Indianapolis-Marion County budget accordingly. As the state confirms final revenues, it is our job to make adjustments to city-county spending in order to ensure a fully funded, balanced budget."

But a source within city government told Eyewitness News the miscalculation was unusual, saying the state is typically spot-on or even often prone to "under-estimating" revenues.

The person said to find out this late makes "things extremely difficult" as agencies are now being asked to go back and find ways to cut their budgets just days before they're presented to the council.

Eyewitness News reached out to other communities including Lawrence, which was unaware the estimates were off.

In an email to Eyewitness News Dudich wrote:

"Soon, we will send all 92 counties a similar memo to the June estimate that reflects an update to the calendar year 2019 local income tax certified distribution amounts."

Dudich also noted, "if you compare year-over-year data, local units of government will realize an estimated increase of $135 million in total."

But the source said that wasn't the issue, that the new numbers still mean that cities and counties will have to significantly adjust their budgets.

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