Members of the Indiana House and Senate are taking differing stances on whether to return a surplus of state funds to taxpayers.
The differences in opinion was brought up during Saturday’s Third House session on the Indiana University campus, sponsored by the Greater Kokomo Economic Development Alliance.
Last year, lawmakers passed a bill that would provide an automatic refund to taxpayers if the state’s reserve fund reached a certain level. Currently taxpayers could receive an approximately $50 refund, but Sen. Luke Kenley, R-Noblesville, wants to change the law.
Rep. Mike Karickhoff said the issue came to the forefront of discussions when it was discovered the state had $340 million more than anticipated in revenues.
House members want to return half of those funds to taxpayers, he said. The remaining funds would be used to assist the families of the people who died or were injured last year when the stage collapsed at the Indiana State Fair, fund full-day kindergarten and lower the state’s unfunded pension liability.
“I have never been in favor of refunds,” Sen. Jim Buck countered. “We have unfunded liabilities. Sen. Kenley wants to increase the amount in reserve in the event of another economic downturn.”
Buck said, as proposed, it would be a flat refund and would mean people who didn’t pay any state income taxes would still receive some of the funding.
“We could use the funds to pay down the debt and in case of an unexpected economic downturn,” he said. “The decision should be made in a budget year.”
Lawmakers will set the state’s next two-year budget cycle in 2013.
Unlike the January Third House session, which drew a record crowd to discuss the recently passed right-to-work legislation, only 30 people were in attendance during Saturday’s event.
Buck said the state is tracking the number of people no longer paying union dues, the number of employers that locate in Indiana as a result of the right-to-work bill and any changes in wages and benefits in union shops.
Buck said other controversial bills that were passed during previous legislative sessions didn’t have the anticipated negative impact on the state, noting the prevailing wage legislation and the leasing of the Indiana Toll Road. State officials are hoping to show that the same will be true of the right-to-work bill by tracking its results.
“We’re making Indiana more competitive,” Buck said.