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State revenues starting to normalize, ending fiscal year with $3 billion in reserves

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Indiana Comptroller Tera Klutz said the state's financial position is due to its strong fiscal leadership. (Brandon Smith/IPB News)

Indiana’s revenue situation is beginning to normalize after years of major fluctuations due to the COVID-19 pandemic and its impact.

The state closed the books on its fiscal year Thursday with nearly $3 billion in reserves.

State Comptroller Tera Klutz said the state’s financial position is the result of strong fiscal leadership.

“We had another very productive year, with taxpayer refunds going out, historic investments in education, public safety, infrastructure and economic development,” Klutz said.

But Rep. Greg Porter (D-Indianapolis) said Republican supermajorities at the Statehouse failed to make "transformative" investments this past session.

"Instead, they chose to give a handout to the state's very top earners in the form of private school vouchers for the wealthy," Porter said.

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Office of Management and Budget Director Cris Johnston said while state revenues seem to have found their new normal in the wake of the pandemic, there are worrying signs in people’s pocketbooks: household savings is going down and household debt is going up.

“What is that going to mean to sales tax, which — when you look at the revenue report — is about 50 percent of our total General Fund revenue?” Johnston said.

Despite strong reserves, the state did not collect enough to trigger an automatic taxpayer refund. That’s in large part because lawmakers spent $3 billion in one-time funding in the new budget.

Brandon is our Statehouse bureau chief. Contact him at bsmith@ipbs.org or follow him on Twitter at @brandonjsmith5.

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