Indiana is ending the fiscal year with nearly $4 billion in cash reserves after state tax collections came in much stronger than expected.

A new state report shows reserves grew by about $1.5 billion over the past year as tax revenue increased nearly seven percent while state spending remained under tight control.

Governor Mike Braun says the larger surplus gives Indiana flexibility to invest in priorities like infrastructure, lowering health care costs, expanding early childhood education and providing tax relief.

The stronger-than-expected revenue comes after state lawmakers had projected less than one percent growth when they approved the current budget last year.

Democrats, meanwhile, argue the extra money should be used to address unmet needs across the state.