State revenue continues to exceed forecast

The state’s latest monthly revenue report had good news for Indiana’s coffers, with nearly every category of tax collections above estimates forecasted in December and largely bolstered by higher-than-expected gambling collections as the state starts the 2023 fiscal year.

Overall, General Fund revenues for July totaled $1.5 billion, or $72.0 million (5.1%) above the December projection and $147.9 million (11.1%) above revenue in July 2021. Over half of the $72 million over the December forecast came from Riverboat wagering tax collections.

Gambling continued its COVID-19 recovery, netting $44.3 million (5,231.4%) more than expected, for a total of $45.7 million or $44.3 million (3,290.1%) above revenue in July 2021. Racino wagering tax collections didn’t see the same surge, falling short of the December forecast by $800,000 (6.6%), totaling $10.9 million or $700,000 (5.8%) below their July 2021 collections.

Much of the changes in gaming revenue come as a result of Senate Bill 382, which Gov. Eric Holcomb signed into law in March. The bill requires wagering tax be reported and remitted electronically and amended the distribution date for certain taxes. However, the accompanying commentary notes this impact will not carry over through the entire 2023 fiscal year.

Sales tax collections were $884.7 million, $13.9 million (1.6%) above the monthly estimate and $54.3 million (6.5%) above last year’s collections for July. In particular, the gas use tax game in $4 million above the forecast while all other sales taxes were $9.9 million greater than estimated.

In terms of individual income tax collections, those surpassed expectations by $11.5 million (2.5%) to total $469.8 million. But corporate tax collections lagged by $400,000 (1.3%) behind projections, totaling $33.6 million.

The report comes just after the state determined how to distribute over $1 billion to Hoosier taxpayers in $200 checks, due to excess revenues collected in the 2022 fiscal year.