February 6, 2008

(STATEHOUSE) – State Sen. Luke Kenley (R-Noblesville) says he is “hopeful a recent slip in state tax receipts will not stand in the way of aggressive tax reform efforts.”

Kenley clarified an earlier warning the state may have to reduce efforts to shift some costs from local budgets to the state in an effort to reduce property taxes — which are determined, collected and spent at the local level. The state receives less than 1 percent of its revenue from property taxes. State budgets are funded primarily through sales and income taxes.

Lawmakers this session are considering proposals shifting child welfare and remaining school operations costs from property taxes to the state in an effort of lessening local property tax burdens. Property taxes are collected and spent by schools and local governments. Kenley and others believe the shifts would more closely align state responsibilities with state budgets.

“Fellow lawmakers and Hoosiers know I am committed to property tax relief and reform. My hope is that a slip in state tax receipts will not stand in the way of our aggressive efforts,” Kenley said. “I was simply offering words of caution. We’re facing a hurdle, not a barrier.”

The Noblesville lawmaker said cost-cutting efforts already underway by Gov. Mitch Daniels’ administration should help ease some of the concern fellow legislators have regarding the affordability of absorbing the additional child welfare and school expenses.

In December, Daniels ordered austerity measures including 5 percent spending cuts by state agencies and delays in budgeted projects.

“Taxpayers have made it clear they prefer spending cuts to higher taxes,” Kenley said. “Clearly, government should tighten its belt whenever possible… just as we would at home.”