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Indiana reports $206 million tax goof



State budget officials announced Thursday a programming error cost local units of government $206 million in local option income tax revenues in 2011 and so far this year.

Democrats on Thursday responded to news of the latest error by blasting Gov. Mitch Daniels’ vaunted reputation as a fiscal hawk.

“Rapidly, an administration that has tried to convince the public that it brought needed sound fiscal management to Indiana state government has become a shining example of ineptitude,” said House Democrat Leader Patrick Bauer and Senate Democrat Leader Vi Simpson.

“Perhaps they 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.

“But these aren’t small mistakes to be shrugged off.

“This is incompetence of the highest order. It is only right that people are losing their jobs. It is only a shame that the governor himself didn’t appear before the press and accept his share of the blame.”

Daniels is on an eight-day “personal” trip to Israel and his office refused to make him available via a conference call.

State Budget Director Adam Horst said the money, plus interest, was being sent to the counties today in an immediate recognition of the mistake.

Allen County is set to receive a one-time distribution of about $10.2 million. It was not known immediately what amounts were going to individual units in the county, such as the city of Fort Wayne.

"It's unfortunate this error occurred," said State Budget Director Adam Horst. "The most important thing that I believe is to restore confidence in that system, provide as much information as possible in as transparent a way as possible…to try to build up that trust and give them the best information available for planning purposes."

It was the second major error discovered in the Department of Revenue in the past six months. In December, Gov. Mitch Daniels announced the state had found $320 million in misplaced corporate tax revenue.

At that time Democrats called for an independent audit of the system but Daniels and GOP legislative leaders refused.

Horst said Thursday the state will bring in outside resources to conduct a thorough review of the system.

He also announced that the commissioner of the Indiana Department of Revenue – John Eckart – has resigned. Two senior supervisors also had left state employment as of Wednesday.

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