Kenley a go-to guy in taxing situations: Influential senator sees public service as his duty

Take a look at some of the most complicated, heated and thankless Statehouse negotiations and chances are you’ll find Republican Sen. Luke Kenley smack in the middle of the fray.

While some Hoosiers are hard-pressed to attend a school board meeting or even try to understand their property-tax bills, the 62-year-old chairman of the Senate Tax & Fiscal Policy Committee sits through hours of public hearings and even more hours of closed-door negotiations.

This General Assembly promises to be one of Kenley’s busiest as he takes a lead role in finding solutions to the state’s property-tax predicament, an issue that is likely to dominate the session.

Ask the Noblesville businessman why he does it and the answer is simple and somewhat rare: responsibility.

“If there’s something that I have an ability to make a contribution in, then I dive right in and I bring up issues that sometimes nobody wants to touch,” Kenley said. “Democracy is not an easy system, but it’s really the greatest one in the world. But it’s not going to work if people don’t participate.”

That’s a message he tries to pass on by holding annual leadership conferences in which he coaches high school senior class presidents from his district about the duty of public service.

“It’s important for them to think about public service as part of what they’re going to contribute,” Kenley said. “It’s part of the commitment to the success of our society.”

‘Everybody’s got to pitch in’

Maybe that sense of responsibility comes from growing up as the eldest of eight children. Apathy-at least in the family setting-wasn’t a luxury afforded in his home.

“When you’ve got eight kids, everybody’s got to pitch in and be part of the team,” Kenley said. “Nobody can really go your little own way because there wasn’t really room.”

Kenley’s mother was from a west Texas ranching family. She died when he was only 9 years old. Each summer, while their father ran his Noblesville grocery business, the Kenley children were sent to Texas to work on their grandparents’ cattle ranch.

By the time Kenley graduated from Noblesville High School in 1963, he was senior class president and high-school sweethearts with his soon-to-be wife, Sally. He studied economics at Miami University in Oxford, Ohio, and entered Harvard Law School in 1967.

By the fourth year of the Vietnam War, when the draft was in full swing, Kenley’s father-in-law sat on the local draft board and called Kenley with some news.

“He said, ‘I hate to tell you this, son, but you’re No. 3 on the [draft] list,'” Kenley said. So he left law school two years in to enroll in officer candidate school.

After two years of officer training, the war was winding down and Kenley was released from his commitment before seeing any active duty. He went back to law school and graduated in 1972.

He returned to live in Noblesville, and he practiced business law in Indianapolis before leaving the post to run the thirdgeneration family grocery business. Under his management from 1974 to 1998, Kenley Supermarkets expanded from 20 employees and $2 million in annual sales to two stores, 175 employees and $16 million in annual sales. Marsh Supermarkets Inc. bought Kenley Supermarkets in 1998.

The growing grocery business couldn’t keep Kenley from getting involved in public service. In 1974, there was an opening for a Noblesville City Court judge, and Hamilton County Republican leaders asked Kenley to take the job.

“I said, ‘I think about half these [defendants] shop at my store,'” he recalled. “I wasn’t really sure that it was a good idea.”

But the county chairman pushed and Kenley acquiesced, promising to take the job only until someone else decided to run for the elected post.

Fifteen years and more than 40,000 cases later, Kenley finally stepped down, having his fill of cases involving dogs running loose and drunk driving.

“After 15 years, I learned that nobody would ever volunteer for that job,” he said.

At the Statehouse

In 1992, he was tapped again, asked to take over a campaign for state Senate. Dick Dellinger, a fellow Republican, had thrown his hat into the race to run against the Democratic incumbent. But Dellinger needed to get out of the race for medical reasons and recruited Kenley.

“I was tricked into that one just like I was tricked into being a judge,” Kenley said with a laugh. He said Dellinger told him it would be a part-time job and an easy race, neither of which proved to be true. But Kenley hasn’t had a close race since and has quickly moved up the ranks in the Senate, gaining a reputation for being smart, jovial and a tough negotiator.

“I was asked to run by my friends and neighbors,” he said. “My feeling was that they sent me there to deal with issues and to try to make a difference, and not to worry about whether I’m going to get reelected or not.”

When longtime Senate Finance Chairman Larry Borst lost his re-election bid in 2004, the Senate split fiscal policy between two committees. Kenley leads the Senate Tax & Fiscal Policy Committee.

When appointed to the newly created committee, Kenley said, he jumped at the chance to “shape the philosophy of taxation in Indiana.” He sat down and thought about what an ideal tax system should look like and set out these guidelines: Taxes should be broad-based with low rates and they should treat people who see themselves as peers similarly.

In that role, Kenley ended up in the middle of the debate on how to fund Lucas Oil Stadium. He’s pushed to have the school funding formula more closely match enrollment and has advocated for allowing local units of government more freedom to raise other types of taxes to offset property taxes.

In most of these debates, Kenley’s succeeded in taking legislative baby steps toward those goals, but he recognizes that change can be slow. And oftentimes thankless. His proposals often irritate powerful groups, from the teachers’ unions to business interests to attorneys.

With a tax bill, if “you make everybody a little bit mad, you’re getting close” to a fair bill, Kenley said.

In that same tradition, Kenley is now pushing for an extension of the sales tax to most services except medical services. Two groups he counts himself a member of-small-business owners and attorneys-are fighting the idea tooth and nail. But Kenley argues that by taxing most services, the Legislature could find money for property tax relief and lower the salestax rate to 5 percent.

“I have a feeling that I may be out there on an island by myself again on this one,” Kenley said. “But at some point when you make these decisions, you’ve got to quit just looking out for yourself and try to print a plan that is fairest to all people.”

Tough negotiator

Other lawmakers say that, behind closed doors, Kenley is a smart and tough negotiator. On occasion, he’ll irritate his own caucus more than clashing with House Democrats. In fact, Kenley and House Speaker Pat Bauer, D-South Bend, have nothing but nice things to say about each other.

“[Kenley] is one of the smartest legislators we have,” Bauer said. “It’s a wonderful experience negotiating with him. It’s always a learning experience, and we’ve always gotten something done in a positive way.”

Senate President David Long, a Fort Wayne Republican, said Kenley can keep his cool in talks.

“Luke has a good sense of humor, which is crucial in a high-stress job, but he’s also tough,” Long said. “He knows how to negotiate and get from point A to the end of a plan. He’s probably a darn good chess player.”

In 2001, with Indiana in the fiscal doldrums and no other candidate to his liking on the horizon, Kenley made a bid for governor.

“I said, ‘If I don’t do it and we don’t get somebody in there who’s going to be responsive to business and help bring us out of the dip we were in, then [I’ll] be kicking myself, saying I didn’t meet the responsibility I should have met,'” he said.

But after then-U.S. Budget Director Mitch Daniels decided to run for the post, Kenley dropped his bid, backing Daniels instead. Asked if another gubernatorial run is in the cards, Kenley didn’t flatly say no, but made it sound unlikely. He said he wants to help Daniels get re-elected. He would be 67 years old by the 2012 election.

“Being a good governor demands a lot of energy,” Kenley said. “That’s a little bit attuned to a younger person.”

He said he wants to run for re-election to his Senate seat in 2008, but hasn’t thought past that election. Instead, he enjoys running his Noblesville-based commercial real estate firm and taking breaks at the vacation home he and his wife built in Texas. With a view of the mountains and wide-open spaces, Kenley said, it’s a retreat.

“I never had any desire to go to Florida in the winter,” he said. “It’s too crowded and there’s nothing to do, but this appeals to me. I really enjoy it out there-it’s a very rugged, individualistic culture, and it’s beautiful country.”