The Indiana State Budget Agency recently released the revenue collections report for October. The overall collections for the fiscal year now stand 2.8% ($136 million) below projections; not good, but not critical at this juncture.
The troubling numbers for the revenue watchers are the corporate tax collections. They were down again this month and are now at 52% below the April revenue forecast projections. Nobody really knows how to fully explain the drop. While the corporate collections historically fluctuate widely from month to month and are the hardest to predict for many reasons (that are not directly related to predictable economic activity), the gap between projections and collection is extraordinary. Fortunately, corporate collections have never represented a big piece of the pie (only around 6%) when compared to sales (48%) and individual income (36%) tax collections. Still, the unforeseen drop accounts for $126 million of the $136-million-dollar shortfall.
The State Budget Agency has drilled down on the matter and is attributing it to a high volume of refunds. But what is triggering the refunds is not clear either. Sometimes refunds can cover a number of years. They could be tied to a recent settlement of numerous cases or result from changes in the law – lots of possible factors. Whatever they are attributable to, they probably don’t mean that corporate collections will stay down; they are likely to rebound over the balance of the fiscal year and smooth out the impact, but they are not likely to recover to the total of the original projections. Let’s hope this is just a temporary mysterious dip that is evened out over time.
For those interested, you can review all thenumbersand commentaryfrom the State Budget Agency.
It’s tax season! As you prepare to file your taxes, remember to store your personal information such as W-2 forms, bank account summaries and other tax-related documents in secure locations. This time of year, identity thieves are especially prominent and out to steal real taxpayer identities and file fraudulent tax returns to request and steal the victims’ refunds.
Since its inception in 2014, the Indiana Department of Revenue’s Identity Protection Program has identified and stopped more than $100 million in fraudulent refund attempts and helped thousands of legitimate taxpayers realize their identities have been stolen. This year, the department again will be implementing the Identity Protection Program to protect Hoosier taxpayer identities and refunds. This program will look similar to the security measures implemented last year, including the Identity Confirmation Quiz, a two-minute quiz asking some taxpayers to confirm their identities.
Those selected to complete the Identity Confirmation Quiz will receive a letter from the department. The Identity Confirmation Quiz is taken on a secure web site or over the phone and contains four short questions, which only the person asked to complete the quiz would be able to answer.
Through the Identity Protection Program, the department aims to protect taxpayers’ identities and potential refunds and the state of Indiana from potential refund fraud.
For more information about the Identity Protection Program and tips for protecting your tax refund and identity, visit the department’s Stop ID Theft web site.
California lawmakers are considering a move that would allow the state to generate revenue by allowing advertising on their license plates. No doubt, some will say this is an ideal merging of the public and private sectors, while others may get the creeps about such a partnership. While the funding source may be unique, the concept really isn’t. Advertising on vehicles is nothing new. Think of the Oscar Meyer Weinermobile, or those Red Bull cars we see in downtown Indy … or that van promoting the re-election of Hill Valley Mayor Goldie Wilson.
Like an early, static version of Twitter, license plates have long allowed drivers to stamp a statement right onto their bumpers, as long as that statement is of extremely limited length. But lawmakers in California are deliberating a bill that would allow electronic license plates that would display advertisements and other messages when cars are not in motion, turning every car on the road into a moving billboard.
When cars are moving, the electronic registration would display the usual numbered and lettered identifier. But when parked or stopped for more than four seconds in traffic or at a red light, the plate would display anything from advertising messages to emergency information or Amber Alerts.
For the highly insolvent state of California, such ad-bearing devices could generate a good deal of revenue. For drivers, they could generate a whole new source of distraction on our already media-saturated roadways. But in heavily gridlocked places like California, it could provide a fast means to disseminate important information quickly and even provide emergency instructions to drivers who regularly deal with natural disasters like mudslides, wildfires, and earthquakes. And don’t worry, Los Angelenos: You’ll still be able to advertise your ride as “SMOKN” in between the paid messages.
Looking for ways to deal with greatly reduced tax collections, states are focusing on their unclaimed property statutes as a potential source of revenue. States are discovering that by changing their laws they can increase what escheats to the state coffers. Changes like expanding the definition of what constitutes "unclaimed property," shortening the period for owners to claim it and limiting recovery options result in more of the property going to the state (and less to the owners).
It is estimated that states collectively hold $33 billion in unclaimed property. Delaware expects to collect $380 million in 2009. So it is no wonder that struggling states are tempted to grab what they can in these disconcerting developments.
Economy got you down? You’re going over that budget with a fine-toothed comb, looking for places to slice and dice?
Stop! OK, at least slow down. While watching expenses is certainly understandable, don’t make short-term decisions that could cause long-term harm. In other words, don’t abandon advertising, marketing and sales efforts. They, after all, are the foundation for current and future business.
But you say that your competitors are slamming the brakes in these areas. That is an opportunity for your organization to have its message heard loud and clear.
You don’t believe me? Read the words of two people in the business of helping companies like yours grow your business. They are both featured in the current BizVoice magazine.
NEWS ALERT: Apparently, Michael Phelps is a big deal.
While his accomplishments in the pool have rendered him an archetype in his sport with legendary status, it’s the personal revenue machine he’s generated that might be equally appealing to capitalists everywhere. This article on ESPN.com is quite telling, and explains how Phelps could end up taking in over $100 million from the global business community.
Eight gold medals in one Olympiad are cool, I guess. I’ll only take mild offense that similar financial accolades were never tossed my way when my Lil’ Steelers bested the previously undefeated Lions in the 1986 Boone County Pee Wee Youth Football Championship. Pretty impressive milestone, but whatever.