Rebate on 2012 State Tax Form Will Be $111
Joint filers receive $222 in first-ever automatic refund
Governor Daniels (r) and Lieutenant Governor Becky Skillman announce the final rebate figure. (WIBC.com photo: Eric Berman)
The state's final calculations of the first-ever automatic tax rebate will give every taxpayer a $111 rebate.
A 2011 law gives taxpayers half of any state surplus above 12.5% of the total budget. It's been clear since the June 30 end of the fiscal year that the increased surplus would trigger the rebate for the first time.
Governor Daniels says the refund translates to a 13% tax cut for the typical taxpayer. One in 10 taxpayers will no longer owe anything.
Next year's tax form will include a black box instructing you to subtract the amount of the rebate before calculating your final liability. Joint filers receive a double rebate of $222.
Only Hoosiers who filed a tax return for 2011 are eligible.
The rebate will trim the surplus by $361 million, with an equal amount going to shore up state pension funds. Daniels says the budget appears on track to hit the rebate threshold again next year. After that, rebates will only be given every other year, to put it in sync with the state's two-year budget cycle.
Governor-elect Mike Pence wants to keep a surplus of 15% of spending as a precaution against a double-dip recession, a threshold that would require a change in the rebate law.
House Minority Leader Scott Pelath (D-Michigan City) calls the rebate announcement a "small, nice thing," and echoes Daniels in agreeing that money belongs to taxpayers, not the government. But he says the state should make adequate funding of education and economic development efforts its top priority, and not become so focused on ensuring future rebates that those responsibilities are underfunded.