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4/6/2012 11:30:00 AM
EDITORIAL: Another debacle in state budgeting

Tribune-Star

It is quite a good thing that Indiana’s local governments and school boards are receiving unexpected money from the state. It is quite a bad thing that the influx of money — which on Thursday rose to $526 million in total within the last four months — comes because of incompetence in the state Department of Revenue.

In the latest case, as reported on today’s front page, the state has failed to distribute to local government some $206 million it collected in county option income taxes. That announcement came even as the state was beginning to send out that money, posthaste.

Still fresh in memory, in December the state discovered $320 million it didn’t know it had. About one-fourth of that found money is being used to fund all-day kindergarten throughout the state next year — which is a very good thing, although there is still worry about unstable future funding.

The latest mistake is being blamed on a computer programming error, but the immediate departure of two senior managers in the Department of Revenue and the pending resignation of the department’s commissioner suggest that human error is involved in not discovering the programming error earlier, or preventing it at all. The people of Indiana have every right to expect that the money they are taxed for governmental services be properly accounted for and paid out — no matter the computer software being used.

For Vigo County, Thursday’s distribution of monies means $5.1 million (not including interest) coming here for redistribution within the county. Much of that money is for underpayments already owed the county. The rest is money it would have been underpaid through the end of 2012 had the error not been discovered. Our other “home” counties — Clay, Parke, Vermillion, Sullivan and Greene — will receive lesser but significant amounts.

All levels of local government need this money — which is truly county money and not state money — to deal with the dramatic cost-cutting they have encountered in recent years. One can only imagine the gnashing of teeth that the underestimation and under-distribution of these funds have caused county, city and town budget minders. Also consider the jobs cuts, projects delayed and unnecessary interest the state is paying the counties for these mistakes.

As these things go, the mistake is already politicized in a few short hours. Republican leaders Brian Bosma and David Long issued a businesslike statement calling for transparency and bipartisan support for a thorough, independent investigation. That high ground, of course, is something the party in power can take. By contrast, in a laughable, overly political statement, Democrats Pat Bauer and Vi Simpson (the latter of whom we thought knew better) took a we-told-you-so stance, noting they had asked for an outside audit when the $320 million was “found” last year. (Sample laugh line: “Perhaps they [Republicans] can try and explain this latest mistake away by saying ‘oops’ and comparing it to finding millions of dollars stuck in the cushions of a couch, just as they did last year.”)

Hubris aside, the serious part of that statement is that the Daniels administration can’t just say “oops” and move on. And it hasn’t. Instead, it has ordered an immediate release of the funds to counties and is looking for outside auditors. Still, $526 million in revenue errors gives Hoosiers little confidence that the next steps will be much more accurate.

The state has been ever ready in recent years to give out grades to local schools for their performances and test scores. For this debacle, the state administration deserves an F in accounting.

Related Stories:
• State's costly error is windfall for 91 counties
• EDITORIAL: Restoring confidence in Indiana Department of Revenue won't be easy
• OPINION: Expect more explaining from the state on revenue mistakes

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Editor, John C. DePrez Jr.; Executive Editor, Carol Rogers; Publishers: IBRC and IAR


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