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Senator Wants Changes To Automatic Taxpayer Refund

Tax forms

Senator Luke Kenley wants to make changes to Indiana’s automatic taxpayer refund.  If passed, it would be harder for Hoosier to get a refund in the future.

The refund mechanism was put in place last year. If the state’s budget surplus surpasses ten percent of the total budget, the taxpayer refund kicks in. When the surplus is calculated at the end of the fiscal year in June, projections say it will be at least $300 million more than the ten-percent level, triggering a refund of about $50 per taxpayer.

Noblesville Republican Kenley says he wants to raise the threshold.

“I think the reserve, based on our experience in the recession where we took three billion dollars to solve that problem," he says. "I think that the ten percent just looks too tight to me.”

Kenley’s bill, currently in a Senate committee, would keep the base level for the refund at ten percent, but add an additional reserve requirement of ten percent of the K through 12 school budget.

Based on the current budget, that would require another $650 million in reserve, meaning the taxpayer refund would not kick in until the surplus reached about $2 billion. But those changes would not go into effect until after 2012, meaning this year’s potential refund would remain in place.

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