News and Tribune

Clark County

April 8, 2012

HAYDEN: Expect more explaining from the state on revenue

INDIANAPOLIS — Even before Indiana state budget director Adam Horst finished briefing the media on another mega-million dollar mistake made by the state revenue department, you could see the beating that was coming.

It was Horst who had to deliver the news that because of a computer programming error, $206 million in local income tax revenues owed to local governments over the last 15 months had been mistakenly pocketed by state government instead.

With a big dose of humility, the Republican-appointed Horst served up details of how the money was lost and found on Thursday morning. By noon, Democrats were crowing with delight.

Who could blame them? Horst’s boss, Gov. Mitch Daniels — out of the country on a private trip to Israel — has held himself out as fiscal disciplinarian, a tough taskmaster who sees public-finance penny-pinching as a virtue to be heralded and modeled by all.

Daniels also rejected the Democrats’ calls for an independent audit of the Indiana Department of Revenue back in December, after his budget analysts found $320 million in lost corporate tax revenues that the DOR didn’t know it had.

So in a bit of political theater, John Gregg, the Democratic candidate who wants to be the next Indiana governor, stood on the Statehouse steps Friday morning, holding up a copy of “Accounting Workbook for Dummies” and a college textbook, “Basic Accounting Skills.”

He promised to keep carrying them around until somebody from the Daniels administration takes them off his hands.

Expect to see more of that from Gregg, a former state lawmaker who’s still struggling to win name recognition in his race against the better known Republican candidate, U.S. Congressman Mike Pence. (The nonpartisan Howey/DePauw Indiana Battleground Poll, released late last week, showed 70 percent of voters know who Pence is. Only 29 percent know who Gregg is.)

But aside from the political hay to be made, there may be more revelations about the state revenue department in the months to come. Daniels, backing off on his initial resistance to an outside auditor, has now ordered an independent look at how the department keeps it books.

Ed Feigenbaum, the well-respected publisher of the Indiana Legislative Insight newsletter, reported in a recent issue that state auditors have already found other problems in the department that have yet to be widely revealed.

Feigenbaum reported the staff at the State Board of Accounts found the Department of Revenue was unable to account for all the payments that make up a $47 million balance in a collections fund. They also found that the DOR duplicated, overstated or understated revenues in other accounts.

Those problems may not come close to the half-billion dollar blunders that have been publicly reported so far. But as Daniels himself has often preached, every tax dollar needs to be accounted for by the collectors and spenders of those tax dollars. This story isn’t over yet.

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com.

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