The phased reopening of some Indiana businesses following the May 4 expiration of Gov. Eric Holcomb's stay-at-home order helped the state last month reduce its tax revenue losses compared to April's record-setting drop.
According to the State Budget Agency, Indiana's General Fund collected a total of $952.4 million from all revenue sources in May.
That was $233.3 million, or 19.7%, less than predicted by the December 2019 revenue forecast, and $187.4 million, or 16.4%, below state tax collections for May 2019.
It also was the largest monthly revenue shortfall — excluding April 2020 — since January 2009, when Indiana was in the midst of the Great Recession.
April likely will stand for a long time as Indiana's greatest monthly revenue miss, with tax collections falling short of the mark that month by $964 million, or 43.9%, due to the near-total shutdown of the state's economy to minimize the spread of COVID-19.
Data show the partial reopening of Indiana's economy boosted May collections of both sales and income taxes — the state's two largest revenue sources — compared to the forecast, while wagering tax receipts remained at zero for an unprecedented second month due to the continued shutdown of Indiana's casino industry.
Casinos now are scheduled to reopen in Northwest Indiana, and across the state, at 6 a.m. Monday.
Cris Johnston, director of the Indiana Office of Management and Budget and a Crown Point native, said he's still working to understand why May sales tax receipts came in $102.2 million, or 14.9%, off target, similar to April's sales tax miss of $103.3 million.
"Sales tax is generally a slow and steady revenue stream. Even in tough economic times, there's usually a growth pattern with the sales tax," Johnston said. "But our May collections have not been at this level since 2013."
Johnston also is carefully watching as this month's revenue comes in, since most years, including this year, June has the second-highest forecast monthly revenue total after April.
"June will have similar challenges to the month of April, but perhaps not as severe," he said.
The Hoosier State is likely to get back a good chunk of its missing April revenue once all 2019 personal and corporate income tax returns are filed by the July 15 deadline, rescheduled from the traditional April 15 filing date.
Johnston also is hopeful the federal government either will provide additional coronavirus assistance to states or loosen the strings on how already distributed federal aid to states can be spent.
In the meantime, however, the governor has ordered all state agencies to reduce spending by at least 15% to adjust for the continuing drop in state revenue during the current budget year, which ends June 30, and beyond.