Indiana’s $320 million mistake is an opportunity

Indiana Democrats were absolutely right to call for an investigation of how the Daniels administration managed to misplace $320 million in tax revenue. As the Indianapolis Star editorialized, without a reliable audit, how do we know that other funding streams are being accounted for properly? Republicans on the State Budget Committee didn’t seem too concerned, though — they rejected the idea on a party-line vote.

But going forward, the situation should be about more than finger-pointing. A report by Tom Lobianco of the Associated Press makes clear that this isn’t just the “bank error in your favor” that Gov. Mitch Daniels joked about. It’s a gift that keeps giving, to the tune of $120 million a year that the state wasn’t expecting.

What should we do with the money? Republicans seem enamored of two options: padding the state’s bank account or triggering automatic tax refunds that kick in if state budget reserves top 10 percent of expenditures – maybe $50 per taxpayer.

Here’s another idea: Let’s at least consider using the money to establish a state-funded pre-kindergarten program, something that 40 other states already have.

Democrats were pushing this idea before the accounting error was revealed. House Democrats, in their “Helping Hoosiers Now” agenda, called for a voucher program to help low-income Hoosiers pay for pre-school. Senate Democrats proposed creating an Office of Child Development and Early Learning and providing preschool grants to middle-income families.

These are modest proposals, but Democrats are minorities in both houses; they can’t do anything without Republican support. Continue reading