4/8/2012 9:46:00 AM EDITORIAL: Restoring confidence in Indiana Department of Revenue won't be easy
The timing of Gov. Mitch Daniels’ trip to Israel was either really good or really bad.
As members of his administration were breaking the news that the Indiana Department of Revenue had mistakenly withheld $206 million that should have been distributed to local units of government, Daniels was out of the country. He had left for Israel two days earlier, the same day he learned of the mistake.
Certainly, the timing was coincidental. Still, it’s unfortunate Daniels wasn’t around to address the inevitable questions about how such a mistake could have happened.
This was the second such snafu turned up in the last four months.
In December, state budget analysts discovered $320 million the state didn’t know it had. The result then was more money for victims of last summer’s stage collapse at the Indiana State Fair and funding for all-day kindergarten at schools across the state. This time, the money will be welcomed by local units of government that have been forced in recent years to make painful cuts to their budgets.
Nonetheless, the news has to be troubling for Indiana taxpayers.
How can we be certain that this latest accounting is any more accurate than the last one or the one before that?
Two top officials at the Department of Revenue have already left their jobs as a result of the mistake. The department’s commissioner, John Eckart, has announced that he’ll leave at the end of the current tax season.
That’s probably appropriate. Anyone who still had confidence in the department after the first mistake had surely lost it with the latest revelation.
The state is searching for an outside auditor to review how it could have misplaced $525 million. The state is also looking at new budget controls that would help the state identify problems before they reach such a grand scale.
It is appropriate that the state has agreed not only to send localities their lost revenues but to pay interest for the amount of time the units of government went without the money. It’s also appropriate that officials plan an independent review to find out what went wrong and how to avoid such an error in the future.
It will take all of those things, and a bit of time, to restore public confidence in the state’s ability to manage our tax dollars.