Ellspermann Edition: Local Income Tax Error Remits Nearly $5M to District 74 Counties (4/5/2012)

Thursday, April 5, 2012

Start Date: 4/5/2012
End Date: 4/5/2012

Anyone can make one mistake, but two?  In December Department of Revenue (DOR) found a programming error which “discovered” over $300 million of tax revenue that had been electronically remitted by businesses, but not transferred into the General Fund. This did allow the General Assembly to fund full-day kindergarten, a good outcome.  However, this week a second programming error was discovered by DOR where a portion of local option income taxes collected were being sent to the state general fund instead of being remitted to local counties including CEDIT, COIT, and CAGIT.  In District 74 this amounts to $2.4 million for Dubois County, $1.3 million for Warrick County, $550,000 for Spencer County, and $340,000 for Perry County…totaling nearly $5 million dollars owed to our local counties.

A strong concern I have heard over the past two years is the difficulty of local governments to provide critical services as they faced a recession, property tax caps, and reduced assessed property values all negatively impacting their revenues.  This error made their challenges even worse.  The good news (yes, there is some) is that checks are being issued immediately to all 91 counties in the state.  I agree with Speaker Bosma and Senator Long with the need to move forward at this time with an independent audit that is transparent, thorough and done in a bipartisan fashion.

Hoosiers deserve to have a full accounting for this error. The governor’s office, General Assembly leadership, Democrat and Republican alike, are aligned to ensure a full review of the DOR system and methods is completed.  Based on the findings, I will support necessary legislation and policy changes to ensure Hoosiers can have full confidence in their state’s fiscal affairs.  As Hoosiers, we deserve better.  I will work on your behalf to pursue improvement.

-30-
Rep. Sue Ellspermann (R-Ferdinand)

Ellspermann Edition, Local Income Tax Error Remits Nearly $5M to District 74 Counties, 4-5-12.doc