Tuesday’s news from Indiana’s state budget agency (SBA) can be analyzed by local governments in Monroe County as at least OK.
The SBA’s estimated distribution of local income tax revenue to Monroe County governments is about 9.3 percent higher for 2021 than it was for 2020.
That’s not a complete surprise. A big impact from the COVID-19 pandemic on income tax revenues to Indiana local governments is not expected to be felt until 2022. That’s when distributions of local income taxes (LITs) will be based on the tax collected on income earned in the pandemic year of 2020.
Still, in late summer this year, local governments were drawing up initial budgets for 2021 with some caution baked in. Even though the 2021 LIT distributions are based on taxes collected on income earned in 2019, there was some concern that the ability of wage earners to pay those taxes this year might have been be affected by the COVID-19 pandemic. That concern looks like it has been somewhat relieved by Tuesday’s estimates from the SBA.
But based on the SBA estimates, the increased amount of revenues that Bloomington can likely factor into its 2021 plans will not be enough to tip the balance from a deficit budget to one where revenues exceed expenses.
Responding to a query from The Square Beacon, city communications director Yael Ksander said that “[T]he allocation for the City would still not equal the amount of deficit spending the 2021 budget proposes.”
Planned expenditures won’t be affected by Tuesday’s SBA estimates, Ksander said. “The 2021 expenditure budget will not be revised in light of these new estimates. This additional revenue would simply diminish the level of deficit spending.” Less deficit spending means the city will won’t have to tap as much in reserves as it had planned. Continue reading “Income tax estimates from state for Monroe County, Bloomington 2021 budgets: Up 9.3 percent compared to last year”