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Changes possible for Indiana's automatic taxpayer refund

A state senator wants to raise the level of surplus needed before triggering a tax refund. The refund mechanism was put in place last year.

If the state’s budget surplus surpasses 10% 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 10% level, disbursing a refund of about $50 per taxpayer.

State Senator Luke Kenley (R-Noblesville) says he wants to raise the threshold to be on the safe side.

“I think the reserve, based on our experience in the recession where we took $3 billion to solve that problem…I think that the 10% just looks too tight to me.”

Kenley’s bill is currently in a Senate committee. It would keep the base level for the refund at 10%, but add an additional reserve requirement of 10% of the K-12 school budget.  Based on the current budget, that would require another $650 million in reserve, meaning the taxpayer refund wouldn’t kick in until the surplus reached about $2 billion.

If signed into law, those changes wouldn’t go into effect until after 2012, so this year’s potential refund would remain in place.

Brandon Smith is excited to be working for public radio in Indiana. He has previously worked in public radio as a reporter and anchor in mid-Missouri for KBIA Radio out of Columbia. Prior to that, he worked for WSPY Radio in Plano, Illinois as a show host, reporter, producer and anchor. His first job in radio was in another state capitol, in Jefferson City, Missouri, as a reporter for three radio stations around Missouri. Brandon graduated from the University of Missouri-Columbia with a Bachelor of Journalism in 2010, with minors in political science and history. He was born and raised in Chicago.