INDIANAPOLIS — Indiana’s finances are taking a major hit from the coronavirus crisis, but what is not known is just how big that hit will be.

The coronavirus pandemic has caused unemployment claims to skyrocket with business and factory closings in the past couple weeks, along with less retail spending being expected, that would mean a sizeable hit to sales tax revenue.  There will also be a three-month delay in the normal April tax filing deadline that will cause a delay in tax refunds which could slow spending.

On Friday Gov. Eric Holcomb said that perhaps $1 billion will have to be spent from the state’s $2.3 billion in cash reserves to get through the budget year that ends June 30.

State officials say that income tax collections in April could be down 50% with the tax filing deadline delayed until July.

The federal coronavirus economic relief package approved by Congress last week dedicated $150 billion for state and local governments, with at least $1.25 billion for the smallest states. Indiana officials haven’t yet said how much they anticipate the state will receive.

With casinos closed, some $50 million a month in gambling taxes will also be lost.

Indiana’s new unemployment claims skyrocketed to 62,777 during the week that ended March 21, compared to 3,400 claims a week earlier. Those numbers are expected to increase.  Some economists say that the state’s unemployment rate could jump from 4.1% in February to 10%.

 

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