- Associated Press - Thursday, December 15, 2016

INDIANAPOLIS (AP) - Indiana will collect more than $1 billion in new tax revenue to spend in the next two-year state budget, but also will take in about $300 million less than the General Assembly budgeted for in the current fiscal year, the state’s latest revenue forecast released Thursday projects.

Despite the projected shortfall this year, the incoming administration of Republican Gov.-elect Eric Holcomb likely will not have to make major cuts to bring this year’s budget into balance, said state Sen. Luke Kenley, R-Noblesville, chairman of the Senate Appropriations Committee.

A surplus in the state’s Medicaid budget and lower-than-expected K-12 school enrollment should cover the gap, Kenley and House Ways and Means Chairman Rep. Tim Brown, R-Crawfordsville, said.

Revenue forecasters attributed most of this year’s shortfall to lower than expected sales tax revenues, driven largely by lower gas prices.

Despite a forecast of revenue growth of 2.9 percent in fiscal year 2018 and 3.9 percent in fiscal year 2019, Brown and Kenley were cautious.

“There are so many things on the horizon that could derail this forecast,” Brown said.

Indiana’s current budget ending June 30 spends about $30 billion. The revenue growth will allow Holcomb and leaders of the Republican-dominated General Assembly to spend the extra money on priority items such as new highway spending, combating opioid addiction and expanding the state’s preschool pilot program for low-income students.

However, the state must retain a strong surplus and spend cautiously, Kenley said.

The national economy has been growing for 85 months without signs of a recession, “and we know those always come about,” he said.

State Sen. Karen Tallian, D-Portage, the top Democrat on the Senate Appropriations Committee, said it’s obvious the national economic expansion currently underway isn’t reaching most Hoosiers.

“We are not seeing such a rosy picture,” Tallian said. “It is clear Indiana won’t have a lot of extra money to put into the next budget.”

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This story has been corrected to show the amount of lower revenues than budgeted for in the current fiscal year is $300 million, not $378 million.

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