County in line for cash

Indiana will pay local governments delayed tax revenue this month.

Gov. Mitch Daniels on Friday ordered that the remaining $212 million long owed to local governments be repaid by the end of May.
Jackson County's share of that money totals $1,293,481.

"As the only state in the Midwest that is in the black fiscally, we're being extremely careful about every dollar," Daniels said. "But the very strong March and April revenues strengthen our confidence that we will register a fourth straight surplus this year, and that we can accelerate this final repayment of the debts the state once owed to schools and towns."

During an extended period of deficit spending, starting in 2002, state government delayed payments totaling $761 million to local schools, higher education and local governments, often forcing local schools and municipal governments to borrow money.

The city of Seymour, for instance, recently took steps to borrow from its Third Street Sewer Project fund, and Seymour and Brownstown school districts recently took steps to borrow because of delays in receiving tax revenue.

Seymour Community Schools Superintendent Bob Schmielau said Friday that's good news.

"Having that for cash flow is helpful," Schmielau said. "It will help us because we've had to borrow. Depending upon the delay of the property tax, we may have to borrow again, but this would forestall that."

Property taxes pay about half of the district's general fund expenses, or about $10 million, and about 100 percent of other expenses, including transportation and debt service accounts, Schmielau said.

Seymour Mayor Craig Luedeman shared those sentiments. "We're still going to have to borrow, but that will slow it down," he said.
The delayed funds will be sent to county auditors, who are responsible for distributing the money to other taxing units.

County Auditor Debby Eggeman said Friday she was surprised to hear of the early payment.

"It's the property tax replacement credit and state homestead credit distribution that we always get, but they're wanting to distribute the May and July payments at the same time," Eggeman said after talking with state officials about the plan. "It's not new money, but we are getting some of it sooner."

Eggeman said the money should be distributed to local government units within two or three days of her office receiving the payment.

The state was scheduled to send $106 million to local governments this month but will now send $212 million, which will complete all that is owed.

The most recent monthly revenue report, for April, showed that for the current fiscal year to date, total revenues exceed forecast by $133 million while spending is being held below budget.

Late payments

Beginning in January 2006, Gov. Mitch Daniels ordered repayments of withheld property tax credits to begin. Since then, $518 million has been repaid, including:

$156 million owed to K-12 schools, repaid in January 2006 following the state's tax amnesty program. The remainder of the K-12 school debt, $160 million, was repaid in July 2006.

$131 million was returned to local governments in May 2007.

$40 million was returned to higher education throughout fiscal year 2007 and $31 million this fiscal year. The remaining $31 million will be distributed in the next fiscal year.