The state revenue report for February fell $5 million below December projections, but Ball State's economist Michael Hicks says it's a sign the economy is getting better.
The monthly budget report, released by the Indiana State Budget Agency Wednesday, showed revenue gains compared to this time last year as well as the December revenue forecasts.
"At least we're not bleeding dollars anymore," he said. "Five million dollars isn't great, but the closer the numbers are to forecast reflects a bettering of the economy."
The state has earned 45 percent more interest than this time last year. Revenue from interest is often put back into the general fund, Hicks said, which could trickle down to more funding in the future for things like higher education.
The report shows revenues are $25 million below projections from June 2009, but Hicks said that's in part because a major component of the projections made by Global Insight wasn't really accurate. Global Insight considers things like gross domestic product, unemployment rates and average salary.
Hicks said the state used a big chunk of rainy day funds to counter budget cuts last year, and he hopes it can replenish the rainy day funds in this budget cycle.
The economy is turning around. Hicks said as the economy drops, income from taxes drops three times as much. But when the economy improves, it affects a much greater income from taxes.
"Not surprisingly, in a recession people's consumption and income drop," Hicks said. "Income is progressive. It's very volatile."
Read More
Three Air Jam teams take home the win
October 12, 2012Nineteen teams shimmied, shook and flipped for a sold out John R. Emens Auditorium on Thursday night during the 25th annual Air Jam.
Bill Clinton Speaks at North Central High School
October 12, 2012Former President's Speech Could Have Effect on State Senate Race
