The State Budget Committee met on Friday to discuss the follow up on the $320 million in misplaced corporate tax revenue and the recent discovery of $206 million mistakenly withheld from local governments across the state. State Senator Karen Tallian (D-Portage) offered a motion to increase oversight and transparency and restore a system of checks and balances within state fiscal matters. Despite objections to Senate Democrats call for an independent audit last December, the proposal was met with unanimous and bi-partisan approval.
Sen. Tallian expressed disappointment that it took a second multi-million dollar error however she said she is happy the legislature is finally stepping up and taking the action Hoosiers expect.
“Legislative leaders have come around to the idea of an independent audit, but we need to make it a reality before the next budget cycle,” said Sen. Tallian. “This isn’t money between the cushions; we’re talking about over a half billion dollars in mishandled taxpayer money.”
Sen. Tallian’s proposal is a response to last week’s Indiana Department of Revenue announcement that $206 million in state revenue had been mistakenly withheld from Indiana counties. The department claimed the hundreds of millions of dollars in oversight was the result of a programming error and that immediate action would be taken to repay counties with interest. The latest mistake comes five months after Democrats called for an independent audit to determine the cause and impact of the mishandling of $320 million in state funds.
“Last year, our call for an independent audit was shirked off twice as unnecessary,” said Sen. Tallian. “This new agreement is imperative to determining how these errors went undiscovered for so long. “
On Friday, Democrats again called for legislative oversight proposing clear steps to be taken by the committee and outlined what the audit should entail.
LISTEN to Sen. Tallian’s comments from the meeting:
SEN. TALLIAN: “I think we need to send someone back with a clear message that we want an outside auditor…”
The first portion of the proposal aims to scrutinize the technological basis of how the state collects revenue. Programming and data collection would undergo extensive examination to confirm that revenue is being accurately accounted for. The second part of the audit would ensure that the Department of Revenue maintains best practices when interpreting revenue data and would review internal policies and procedures.
“This audit is to make absolutely clear that we’ve turned over every rock, confirmed every account to demonstrate to the public that there will not be an error of this magnitude again,” remarked Tallian. “It’s about restoring the public’s trust in state government.”
Members of the committee suggested that additional hearings should be held by the Interim Commision on Tax and Financing Policy to further discuss the impact of the under-distribution of the Local Option Income Tax revenue to local governments. The State Budget Committee is expected to meet again in May.