Timely topics on public policy issues related to state and local government in Indiana published once a month.
The Recession May Be a Light Hit for LIT
The December state revenue forecast for Indiana projected that individual income tax revenue would be about $6 billion this year. But Indiana uses local income taxes too, and we know that the income tax revenues that local governments receive in 2021 will be just over $3 billion.
The State Revenue Forecast: We Might be OK
Can it be, is it possible, that 2021 won’t be terrible? The state revenue forecast was released on December 16 to provide a starting point for the Indiana General Assembly to craft a new state budget. Might the coming biennium be OK?
It didn’t look OK last June. State revenues suffered an extraordinary drop in the last quarter of fiscal 2020, down $1.4 billion, 27 percent less than expected. We covered the loss by restricting agency spending and drawing down balances. What had been $2.3 billion in the bank was suddenly $1.4 billion. It wouldn’t last long at that rate, and then much bigger budget cuts would be needed.
A Tale of Two Recessions
How does the Great Recession of 2007-2008 compare to the COVID Recession of 2020? Larry Deboer, ag economist at Purdue University, explains.
COVID Recession Makes Farmland Tax Predictions Harder
Though some predictions are harder than others, we are confident about this one: Property tax bills for farmland owners will go down next year.
We can predict this because we know the base rate for farmland for tax bills in 2021. The base rate is the starting point for the assessment of farmland. The state’s Department of Local Government Finance applied its formula to six years of data on corn and soybean prices, land rents, interest rates and costs, and came up with $1,280 per acre. That’s 18 percent less than this year’s base rate of $1,560. This value is adjusted for soil productivity and other factors to come up with the assessed value for each acre.
Don’t get spun: What’s happening in our economy, right now?
Forecasts? Don’t talk about forecasts. You kidding me? I just want to know what’s happening now!
With apologies to Jim Mora, that’s our problem. What’s happening in our economy, right now?
Rents, Telecommuting and Harry Potter
Believe it or not, these three things get tied together as Purdue Extension specialist, Larry Deboer, explains. Spoiler alert, the pandemic is part of the story.