(AP) — Gov. Mitch Daniels has built a national image as a persnickety
fiscal manager with an eye for detail, but two massive accounting errors
that have tilted Indiana's books by more than half-a-billion dollars
threaten to tarnish that reputation as the popular Republican prepares to
officials announced Thursday that a programming error at the Indiana
Department of Revenue led the state to mistakenly withhold $205 million
that should have gone to county governments. It was similar to a
programming mistake disclosed in December, when budget analysts discovered
$320 million the state didn't know it had.
department commissioner John Eckart weathered the first gaffe but not the
second, and tendered his resignation this week, effective at the end of
the current tax season, state budget director Adam Horst said at a
Thursday news conference in which the most recent oversight was disclosed.
Two of Eckart's deputies also left the department.
The state is
now searching for an outside auditor to review how the state misplaced
$525 million, Horst said. He said he also is looking at new budget
controls that would help the state identify problems before they fester
for years at a time.
"We feel like
it's all you can do at this point, and you hope that over time that
confidence is warranted," Horst said when asked how he would win back the
leaders in Indiana's General Assembly requested a say in picking the
auditor. Democrats, who called for an independent audit of the state's
budgeting operation after the first mistake was discovered, responded "we
told you so" to Thursday's news.
have the most on the line as he winds toward the end of his eight-year run
as governor and continues touring the nation as one of the Republicans
lead budget experts.
announced last year he would not run for president, he still is mentioned
in Republican circles as a possible pick for vice president, although he
has adamantly stated the same family concerns that kept him out of the
presidential race would keep him from joining a ticket. Daniels left on a
private trip to Israel on Tuesday, the same day he found out about the tax
problem. He would not be available to take any questions, spokeswoman Jane
Jankowski said Thursday.
a problem, took responsibility, acted immediately and fixed the problem,"
Jankowski said Thursday. "The state is projecting a $1.85 billion surplus,
largely because of additional cost savings by agencies and stronger than
expected revenues. Indiana's fiscal position is stronger than ever."
critics say he has skated on the national stage, while bungling management
of the state. Beyond the two tax errors, they point to the state's legal
battles with IBM over the privatization of welfare delivery and problems
at the Department of Child Services.
bad legacy," House Democratic Minority Leader Patrick Bauer said Thursday.
"I don't know how he's able to overcome that."
vice president and director of Governance Studies at The Brookings
Institution, said the latest gaffe could hurt Daniels' image.
has a reputation for running a tight ship so continuing problems in the
administration of state government harm that image. It is hard to
understand how millions of dollars weren't distributed properly," West
said. "The governor has to deal effectively with these issues and make
sure they don't keep happening. Otherwise, people will reassess how they
judge his stewardship."
Horst did not
give an exact date for when Eckart would leave his post. The two other top
revenue officials, Chief Information Officer Roy D. Gabriel and Chief
Financial Officer Darrel Anderson, left after the error was discovered,
Department of Revenue spokesman Bob Dittmer said. Eckart was not available
for questions Thursday, Dittmer said.
department says the mishandled money will be distributed with interest to
the 91 of Indiana's 92 counties that have local income taxes.