The Indiana economy continues to grow and that’s good news for taxpayers. State government will have more money to spend over the next two years.
State lawmakers got a forecast of tax revenues over the next two years on Thursday. They were told to expect a gradual acceleration in the Indiana economy, a report that one key lawmaker called “moderately positive.”
Manufacturing jobs, led by the carmakers, are growing faster in Indiana than in the nation as a whole. It’s why economist Douglas Handler gave this assessment to the state budget committee.
“Better to be in Indiana,” he said, “than a lot of other states in the region.”
But there are problems here, too, and they start in the gaming industry. Gambling tax revenues fell by 16% this year, down to the 2003 level, and will continue to fall.
The problem is competition. “We continue to see the pressures,” said analyst David Reynolds, “from Illinois, Ohio and the south Michigan tribal casinos.”
It leads to a prediction that state tax revenues will grow by 2.4% in the 2016 fiscal year and by 3.2% in the 2017 fiscal year, the two years covered by the state budget that will be created in 2015.
So, while Mike Pence was celebrated a record year for economic development deals, he also guarded against a state spending spree.
“It’s important that we continue to exercise caution,” said the Republican governor.
And Democrats warned that the good economic news could quickly evaporate.
“It’s just kind of a re-run,” said Rep. Terry Goodin (D-Crothersville.) “It’s kind of like watching old Batman re-runs, you know the Joker’s gonna come in there somewhere and take some away. Who that Joker is we don’t know.”
Yet there is more money to spend.
“This revenue forecast,” said the governor, “that projects modest growth in the state’s revenues, I think, gives us the room to increase funding to education.”
The governor refused, however, to be specific about the size of the spending hike he will request.
There will also be pressure from lawmakers to address other needs, including the need to hire more caseworkers in the Department of Child Services.
And the governor will push to preserve the $2 billion state surplus.