October 4, 2012 / 6:11 PM / 5 years ago

Indiana to share $720 mln surplus with taxpayers, pension funds

Oct 4 (Reuters) - Indiana will split $720 million from its fiscal 2012 budget surplus between taxpayers and five state pension funds, Governor Mitch Daniels said on Thursday.

The state ended the fiscal year on June 30 with $2.155 billion in reserves, representing 15 percent of its budget, according to a statement from the Republican governor’s office. Under a 2011 law, reserves topping the 10 percent level trigger an automatic refund to taxpayers.

As a result, $360 million will be returned to taxpayers with single tax return filers getting about $100 and joint filers $200 when they f i ll their state taxes next year.

Another $360 million will be distributed to pension funds for judges, prosecutors, state police, teachers, and another one for conservation, gaming and excise officers.

“Indiana’s pension funds, among the best-funded anywhere, are now in even better condition,” Daniels said in the statement.

A June report on state pensions by the Pew Center on the States, however, cited “serious concerns” for Indiana’s public pensions, which were funded at the 65 percent level in fiscal 2010. Sixteen states had a funded level of 80 percent or more, which is considered healthy, according to the report.

A spokeswoman for Daniels said the Pew report was “fatally flawed” because it treats one of the teacher retirement funds, which is funded on a pay-as-you-go basis, as prefunded.

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