Update
In a statement from the office of Indiana Gov. Mike Braun, officials said that Braun “remains committed to delivering meaningful property tax reform.”
“Today, the Senate Committee on Tax and Fiscal Policy has taken steps in the right direction by proposing strong caps on future bill growth, reforms to the referendum process, and targeted relief for veterans, retirees, and first-time homebuyers, but Hoosier homeowners need a solution that includes broad and immediate reductions in their tax bills,” Braun said in the statement. “The Governor will carefully review the changes to his plan and looks forward to working with the House and Senate to strengthen the amended bill to include broad-based and immediate property tax cuts for Hoosier homeowners who have been hit the hardest by skyrocketing home value inflation.”
Original Story
INDIANAPOLIS — Members of the Indiana Senate Committee on Tax and Fiscal Policy passed Senate Bill 1 on Tuesday, the bill that highlights the property tax proposal brought forward by Indiana Gov. Mike Braun.
One of its priorities for the 2025 session, Senate Bill 1 was written by Indiana State Senator Travis Holdman, a Republican from Markle. According to previous reports, this bill gave Senate Republicans the chance to collaborate with Braun and the Indiana House of Representatives to “pass meaningful tax reform.”
”We just think there’s a fine line that we have to walk to make sure that we are careful to be responsible to the local units of government at the same time, provide some relief to taxpayers,” State Sen. Travis Holdman (R-Markle) said.
Gov. Braun’s original plan would have increased homestead deductions for Hoosiers. Now, that provision is gone.
The original plan would have also capped yearly property tax increases at 3% for most Hoosiers, and 2% for seniors. That provision is also gone.
Instead, the amended bill places a 1% cap on property tax increases in 2027 and a 2% cap in 2028.
The amended bill also expands eligibility for senior and veteran tax deductions and creates a new property tax credit for first-time homebuyers.
According to a news release from the Indiana Senate Republicans, officials said the plan includes multiple policies to limit property tax growth, including:
- Freezing local property tax operating fund levies for property taxes paid in 2026, then imposes a 1% growth cap in 2027 and a 2% growth cap in 2028.
- Limiting local governments’ ability to go above the annual maximum operating levy growth cap, requiring officials to pursue a referendum to go above the maximum
- Forcing local government to have a separate public meeting and have a stand-alone vote on annual levy increases
- Creating a new $2,500 property tax credit for first-time homebuyers
- Expanding eligibility for the existing disabled veteran property tax deduction
- Reforming the agricultural land assessment formula
- Requiring all referendums to occur during November general elections
“I want to thank Gov. Braun for his leadership on the important issue of property tax relief for Hoosiers,” Holdman said in the release. “The governor and his team have been great collaborators on this issue. I also want to acknowledge the members of our Tax and Fiscal working group who have put in countless hours over the last two years as we have closely studied Indiana’s tax system. I believe we are offering a strong plan to cut property taxes for all Hoosiers – especially homeowners and farmers – and I look forward to continued work on this bill in the Senate and with our colleagues in the House as we find a plan that will enact meaningful property tax relief for Hoosiers.”
Indiana Senate Democrats said a separate bill could still deliver a devastating blow to public schools.
”I am inclined to support SB 1 if SB 518 were not introduced today,” Indiana State Sen. Fady Qaddoura said.
The bill would require public schools and charter schools to share property tax dollars if certain criteria are met.
”It only applies to school corporations that have 100 or more students with legal settlement who choose to attend a brick-and-mortar charter school,” State Sen. Linda Rogers (R-Granger) said.
Combined with the financial impact of SB 1, Qaddoura said that could mean a loss of $250 million for public schools statewide.
“We heard very clearly from the superintendent of IPS that if SB 518 moves forward, hundreds of employees have to be laid off from IPS, school closures will happen, and students will be impacted,” Qaddoura said.
Although several parents and charter school advocates expressed support for SB 518, most of the roughly 50 people who testified didn’t.
”There were rumors that when we got to town that IPS was a bad school district. We have found nothing that supports that,” Mike Muszynski, a concerned parent, said.
The bill passed 10-4 out of committee.
Property taxes have been one of the main subjects of Braun’s campaign as well as the early part of his term as Indiana’s Republican governor. According to previous reports, Braun spoke at length about tax relief during his recent State of the State address, specifically highlighting Senate Bill 1 in the speech.
“Hoosiers from all over the state told me these tax bills keep rising, but wages aren’t keeping pace,” Braun said. “This is not sustainable.”
As for Gov. Braun’s amended property tax bill, that will be eligible for a reading on the Senate Floor Thursday.
Hannah Adamson contributed to this report.
