Last Updated 2 weeks by Amnon J. Jobi | Amnon Front Page

INDIANAPOLIS (WISH) — Public school advocates and local governments on Wednesday warned of potential cuts as House budget writers got their first look at this session’s property tax relief plan.

The bill, which has emerged as the No. 1 issue for both Gov. Mike Braun and the General Assembly, underwent massive revisions already in the Senate. The current version expands deductions for low-income seniors and disabled veterans and creates a tax credit for low-income, first-time homebuyers but does not allow all homeowners to reset their property tax rates to 2021 levels, as Braun originally wanted.

State budget analysts say even this scaled-back version carries a $238 million price tag next year, rising to $687 million by 2028. Indianapolis Public Schools, the Indianapolis Metropolitan Police Department and the Indianapolis Fire Department all would lose property tax revenue.

• IPS: $1.2 million in 2026, $2.8 million in 2028.
• Indianapolis Police special service fund: $1.3 million in 2026, $3.5 million in 2028.
• Indianapolis Fire special service fund: $2.7 million in 2026, $7 million in 2028.

Braun has threatened to veto the bill if it retains its current form and possibly call a special session of the General Assembly, something House and Senate leaders have said they would prefer to avoid and don’t believe will be necessary.

Late Monday afternoon, Braun and House Speaker Todd Huston said they had crafted an amendment package for the bill, though they would not disclose any details.

That amendment was not part of Wednesday’s hearing in the House Ways and Means Committee. Members of that body took several hours of testimony, including from mayors, teachers and county officials.

Knox County Commission President Kellie Streeter said her county, home to about 36,000 people, gets a little more than half of its revenue from property tax revenue. She said 79% of the county budget goes to courts and law enforcement. If Senate Bill 1 goes into effect as written, Streeter said, Knox County likely would have to cap pay for sheriff’s deputies and might have to shut down some court services such as its drug court.

“We’re trying to exist in this world as counties the best that we can,” she said. “The property tax base is capped out for services and cuts to that base without dedicated revenue replacement is going to force us down a path that we do believe will harm the taxpayers.”

Andrew Bradley, senior director of policy and strategy for the nonprofit Prosperity Indiana, suggested lawmakers consider a low-income homeowner circuit breaker similar to that used by states such as Michigan. Michigan’s program allows homeowners to apply for a full or partial exemption from paying property taxes if their income doesn’t meet certain thresholds.

Rep. Ed DeLaney, D-Indianapolis, said even if someone still qualified for relief under SB 1 as it’s currently written, they would only get about $48 off their property tax bill in 2026 and $133 by 2028. When he asked bill author Sen. Travis Holdman, R-Markle, if that individual amount was worth the overall cost of the bill, Holdman replied the bill still represents major long-term savings.

Holdman noted there’s nothing the General Assembly can do about property tax bills due this year because they are for property taxes assessed in 2024. Those bills will go up by an average of 7% statewide.

Rep. Ben Smaltz, R-Auburn, said even if SB 1 doesn’t end up including reductions in property taxes, at least it can prevent them from going up. “It doesn’t really matter how much it’s saving at this point as we work toward getting in the right place. The idea is to stop that growth. I think we’ve got a little ways to go, but I think we’re on the right path.”

The committee did not vote Wednesday on SB 1. The earliest it could do so is next week.