(INDIANAPOLIS) - Indiana's budget surplus could grow to nearly five billion dollars by the middle of 2027 under a new, more optimistic revenue forecast.
According to the Indiana Capital Chronicle, updated projections presented to the State Budget Committee show tax collections growing more than expected over the next two years. That would leave the state with about two-point-four billion dollars more than anticipated when the current budget was finalized in April.
If the forecast holds, Indiana's cash reserves would climb from an expected two-point-seven billion dollars to about five billion, or roughly 22 percent of annual state spending -- well above the level typically targeted by state leaders.
Republican fiscal leaders cautioned that it's still early in the budget cycle and showed no immediate plans to increase spending. Democrats argued the stronger outlook should allow the state to restore cuts made earlier this year and focus on services for children, seniors, and people with special needs.
Governor Mike Braun praised the forecast, calling it a sign that Indiana's economy is growing and wages are rising.
The Indiana Capital Chronicle also reports that Medicaid costs are now expected to grow more slowly than previously projected. Enrollment in the program has dropped by about 15 percent over the past year, largely due to stricter eligibility checks.
State officials say that while fewer people are enrolled, Medicaid spending hasn't fallen at the same rate because remaining participants tend to have higher medical needs.
Medicaid officials also announced plans to cut payment rates for autism therapy services by about 10 percent, bringing them closer to the national average. More than 8,000 Hoosiers rely on Medicaid-funded autism therapy, most of them young children.
The changes are expected to reduce state spending by hundreds of millions of dollars over the next two years.