Latest news with #AccelerateIndianaMunicipalities
Yahoo
26-04-2025
- Business
- Yahoo
Northwest Indiana communities brace for property tax relief impact
With Indiana's property tax bill signed into law, Northwest Indiana counties and municipalities are preparing to lose out on millions of dollars for essential services. Accelerate Indiana Municipalities reviewed Senate Enrolled Act 1, the property tax relief bill that was signed into law April 15, and found that it phases up the homestead deduction to two-thirds of homestead assessed value and provides a new tax credit up to $300 or 10% of a homeowner's tax bill, whichever is less. While Senate Enrolled Act 1 was a massive bill, the homestead deduction and tax credit are 'the bulk' of the fiscal impact on local governments as it will limit property tax revenue growth in the coming years, especially in communities that are heavily residential, said AIM CEO Matt Greller. The resulting decrease in property tax revenue will likely result in local governments increasing income tax to fund local services, Greller said. Property taxes are a reliable revenue source, Greller said, because it weathers economic downturns. Property tax revenue is also predictable, so local governments can gauge within a percentage point how much money they will receive and can plan expenditures, he said. Income tax is more volatile and susceptible to the ups and downs within the economy, Greller said. It's likely local governments won't have the ability to issue bonds, or debt, because income tax isn't a stable backer, he said. 'We're going to be funding basic government services on income tax, which I think is less optimal than the system of fully funding it with property tax,' Greller said. 'It's less predictable, less reliable with the income tax.' Under the law, counties can raise the local income tax rate cap from 2.5% to 2.9% beginning in 2027. Of that, 1.2% is allocated for county services, 1.2% is allocated for general revenue, 0.4% is allocated for fire protection and EMS services, and 0.2% is allocated for nonmunicipal taxing units. Senate Enrolled Act 1 eliminates the current property tax relief credit, which uses local income tax to fund property tax deductions for residential homesteads, Greller said. The fiscal note for Senate Enrolled Act 1 indicates that Lake County will lose approximately $32.9 million in 2026, $37.2 million in 2027, and $165 million in 2028. Porter County will lose approximately $13.7 million in 2026, $14.5 million in 2027, and $21.4 million in 2028. As local governments are set to lose millions in revenue, Greller said it's unclear how much of the income tax revenue will fill that void. 'Everybody is looking at that big picture impact number, which is obviously important, but we don't have the other side of the story quite yet in terms of knowing how to replace it and what that will drive in terms of revenue,' Greller said. 'Which is scary, because we've now put into law a major policy change without understanding the backside of how much the new revenue stream will produce.' For business personal property tax, Senate Enrolled Act 1 increases the de minimis exemption, which is currently set at $80,000, to $1 million in 2025 and $2 million in 2026. Retroactively to Jan. 1, Senate Enrolled Act 1 exempts new business personal property from the 30% depreciation floor, Greller said. Greller said the business personal property tax change will adversely affect Northwest Indiana, which is a heavily industrial area. Greller said it's unclear to know the exact fiscal impact of the business personal property tax change on Northwest Indiana until it goes into effect. 'The complexity of this bill is overwhelming,' Greller said. Shifting the business personal property tax from $80,000 to $2 million ultimately lowers the assessed value for businesses and offsets any savings when adjusting the homestead deduction to two-thirds of the assessed value for homeowners, said Lake County Finance Director Scott Schmal. Had the legislature adjusted the assessed value for businesses, the legislative session could've ended with a more impactful property tax relief plan, Schmal said. Lake County currently has a 1.5% local income tax, Schmal said, which the county has historically used to reduce property taxes under the property tax relief credit. With the elimination of the property tax relief credit in December 2027, Schmal said property taxes in Lake County could increase. 'In terms of what's the county going to do financially to navigate all this, those strategies are being developed right now,' Schmal said. 'We're still trying to digest everything that's in the bill, what you can and can't do.' Ryan Kubal, Porter County's director of budget and finance, said the impact of the new law will overall slow the growth of all taxing units in the state. In Porter County, officials are discussing how to supplement the reduction in funds through the local income tax, wheel tax and cuts throughout the county, he said. In Merrillville, the town will lose approximately $831,000 in 2026, approximately $957,000 in 2027, and approximately $1.3 million in 2028, said town manager Michael Griffin. Currently, Merrillville uses a 'significant' amount of property tax revenue to pay for public safety. Griffin said while he agrees with the notion of decreasing property taxes, the legislature approached its proposal hastily. Property taxes have been proven across the country to be a revenue source that can withstand economic ups and downs, helps cities and towns secure bonds and is a reliable revenue stream to fund police and fire departments, he said. In Merrillville, 10% of the tax base is business personal property, Griffin said, so the shift will impact the town as well. Merrillville officials will work to understand the new law better and look for places in the budget, Griffin said. But, what's tricky is property tax revenue covers operational costs, he said. 'Right now, we've gotta contend with trying to keep the same level of services as they are,' Griffin said. 'I don't think that there is a city or town in the state of Indiana that will not find this impact complicating if not challenging.' Senate Enrolled Act 1 could have unprecedented consequences for Gary, said one city councilman. 'The concern with Senate Enrolled Act 1 is not necessarily tax relief for homeowners,' said Councilman Darren Washington, D-at large. 'The concern for Senate Bill 1 is that when you give the tax relief to homeowners, who bears the burden of funding government?' As a result of Senate Enrolled Act 1, Washington is worried that Gary will have to implement a local income tax on top of the Lake County tax to fund its resources. The majority of Gary's tax followers come from homeowners, Washington said, and the city doesn't have enough industry to make up for the property tax relief. 'The hope is that this will help spur development in the city of Gary,' Washington said. He believes Senate Enrolled Act 1 will benefit residents in communities such as Fort Wayne, South Bend and Evansville. Washington's concerns for Senate Enrolled Act 1 are coupled with those about House Bill 1448, which requires Gary to pay more than $12 million to East Chicago and Michigan City after a state comptroller mistake that was supposed to address the financial burden following the move of Majestic Star casinos. Money will be deducted from state comptroller funds and money appropriated by the Indiana General Assembly, according to bill documents, and money will be withheld for 10 years. 'We've got to begin to strategize,' Washington said. Washington's concerns about Senate Enrolled Act 1's impact on Gary have impacted his actions on city council. At the legislative body's April 15 meeting, Washington and four other council members voted to rezone the former Alfred Beckman Middle School property to allow for a new development. The former middle school will be rezoned from R2 residential to a planned unit development, or PUD, and B3-1, which allows for shopping centers or large stores. 'We have over 8,000 properties that are unused, and this is one of the reasons why I supported and continue to support the Beckman school project,' Washington said. 'We need businesses and industries on the tax rolls because of things like (Senate Enrolled Act 1).' Other Gary council members — including Mary Brown, D-3rd, and Kenneth Whisenton, D-at large — have agreed with Washington and said developments are the best way to help the city. Washington expects that Gary won't immediately feel the effects of Senate Enrolled Act 1. Hammond Mayor Tom McDermott said in a text to the Post-Tribune that Hammond won't know the exact effects of Senate Enrolled Act 1 until the summer. Council President Dave Woerpel, D-5th, previously related Senate Enrolled Act 1 to the potential Lake County Convention Center project. The Hammond Common Council recently approved a resolution in opposition to the convention center project. Woerpel said it's dangerous to build a convention center when the state hasn't felt the effects of Senate Enrolled Act 1. 'How do you explain that in three to four years from now, that the state says we're going to be $8 million short towards our city budget?' Woerpel previously said. 'And the state says we can impose a city income tax.' akukulka@ mwilkins@
Chicago Tribune
26-04-2025
- Business
- Chicago Tribune
Northwest Indiana communities brace for property tax relief impact
With Indiana's property tax bill signed into law, Northwest Indiana counties and municipalities are preparing to lose out on millions of dollars for essential services. Accelerate Indiana Municipalities reviewed Senate Enrolled Act 1, the property tax relief bill that was signed into law April 15, and found that it phases up the homestead deduction to two-thirds of homestead assessed value and provides a new tax credit up to $300 or 10% of a homeowner's tax bill, whichever is less. While Senate Enrolled Act 1 was a massive bill, the homestead deduction and tax credit are 'the bulk' of the fiscal impact on local governments as it will limit property tax revenue growth in the coming years, especially in communities that are heavily residential, said AIM CEO Matt Greller. The resulting decrease in property tax revenue will likely result in local governments increasing income tax to fund local services, Greller said. Property taxes are a reliable revenue source, Greller said, because it weathers economic downturns. Property tax revenue is also predictable, so local governments can gauge within a percentage point how much money they will receive and can plan expenditures, he said. Income tax is more volatile and susceptible to the ups and downs within the economy, Greller said. It's likely local governments won't have the ability to issue bonds, or debt, because income tax isn't a stable backer, he said. 'We're going to be funding basic government services on income tax, which I think is less optimal than the system of fully funding it with property tax,' Greller said. 'It's less predictable, less reliable with the income tax.' Under the law, counties can raise the local income tax rate cap from 2.5% to 2.9% beginning in 2027. Of that, 1.2% is allocated for county services, 1.2% is allocated for general revenue, 0.4% is allocated for fire protection and EMS services, and 0.2% is allocated for nonmunicipal taxing units. Senate Enrolled Act 1 eliminates the current property tax relief credit, which uses local income tax to fund property tax deductions for residential homesteads, Greller said. The fiscal note for Senate Enrolled Act 1 indicates that Lake County will lose approximately $32.9 million in 2026, $37.2 million in 2027, and $165 million in 2028. Porter County will lose approximately $13.7 million in 2026, $14.5 million in 2027, and $21.4 million in 2028. As local governments are set to lose millions in revenue, Greller said it's unclear how much of the income tax revenue will fill that void. 'Everybody is looking at that big picture impact number, which is obviously important, but we don't have the other side of the story quite yet in terms of knowing how to replace it and what that will drive in terms of revenue,' Greller said. 'Which is scary, because we've now put into law a major policy change without understanding the backside of how much the new revenue stream will produce.' For business personal property tax, Senate Enrolled Act 1 increases the de minimis exemption, which is currently set at $80,000, to $1 million in 2025 and $2 million in 2026. Retroactively to Jan. 1, Senate Enrolled Act 1 exempts new business personal property from the 30% depreciation floor, Greller said. Greller said the business personal property tax change will adversely affect Northwest Indiana, which is a heavily industrial area. Greller said it's unclear to know the exact fiscal impact of the business personal property tax change on Northwest Indiana until it goes into effect. 'The complexity of this bill is overwhelming,' Greller said. Shifting the business personal property tax from $80,000 to $2 million ultimately lowers the assessed value for businesses and offsets any savings when adjusting the homestead deduction to two-thirds of the assessed value for homeowners, said Lake County Finance Director Scott Schmal. Had the legislature adjusted the assessed value for businesses, the legislative session could've ended with a more impactful property tax relief plan, Schmal said. Lake County currently has a 1.5% local income tax, Schmal said, which the county has historically used to reduce property taxes under the property tax relief credit. With the elimination of the property tax relief credit in December 2027, Schmal said property taxes in Lake County could increase. 'In terms of what's the county going to do financially to navigate all this, those strategies are being developed right now,' Schmal said. 'We're still trying to digest everything that's in the bill, what you can and can't do.' Ryan Kubal, Porter County's director of budget and finance, said the impact of the new law will overall slow the growth of all taxing units in the state. In Porter County, officials are discussing how to supplement the reduction in funds through the local income tax, wheel tax and cuts throughout the county, he said. In Merrillville, the town will lose approximately $831,000 in 2026, approximately $957,000 in 2027, and approximately $1.3 million in 2028, said town manager Michael Griffin. Currently, Merrillville uses a 'significant' amount of property tax revenue to pay for public safety. Griffin said while he agrees with the notion of decreasing property taxes, the legislature approached its proposal hastily. Property taxes have been proven across the country to be a revenue source that can withstand economic ups and downs, helps cities and towns secure bonds and is a reliable revenue stream to fund police and fire departments, he said. In Merrillville, 10% of the tax base is business personal property, Griffin said, so the shift will impact the town as well. Merrillville officials will work to understand the new law better and look for places in the budget, Griffin said. But, what's tricky is property tax revenue covers operational costs, he said. 'Right now, we've gotta contend with trying to keep the same level of services as they are,' Griffin said. 'I don't think that there is a city or town in the state of Indiana that will not find this impact complicating if not challenging.' Senate Enrolled Act 1 could have unprecedented consequences for Gary, said one city councilman. 'The concern with Senate Enrolled Act 1 is not necessarily tax relief for homeowners,' said Councilman Darren Washington, D-at large. 'The concern for Senate Bill 1 is that when you give the tax relief to homeowners, who bears the burden of funding government?' As a result of Senate Enrolled Act 1, Washington is worried that Gary will have to implement a local income tax on top of the Lake County tax to fund its resources. The majority of Gary's tax followers come from homeowners, Washington said, and the city doesn't have enough industry to make up for the property tax relief. 'The hope is that this will help spur development in the city of Gary,' Washington said. He believes Senate Enrolled Act 1 will benefit residents in communities such as Fort Wayne, South Bend and Evansville. Washington's concerns for Senate Enrolled Act 1 are coupled with those about House Bill 1448, which requires Gary to pay more than $12 million to East Chicago and Michigan City after a state comptroller mistake that was supposed to address the financial burden following the move of Majestic Star casinos. Money will be deducted from state comptroller funds and money appropriated by the Indiana General Assembly, according to bill documents, and money will be withheld for 10 years. 'We've got to begin to strategize,' Washington said. Washington's concerns about Senate Enrolled Act 1's impact on Gary have impacted his actions on city council. At the legislative body's April 15 meeting, Washington and four other council members voted to rezone the former Alfred Beckman Middle School property to allow for a new development. The former middle school will be rezoned from R2 residential to a planned unit development, or PUD, and B3-1, which allows for shopping centers or large stores. 'We have over 8,000 properties that are unused, and this is one of the reasons why I supported and continue to support the Beckman school project,' Washington said. 'We need businesses and industries on the tax rolls because of things like (Senate Enrolled Act 1).' Other Gary council members — including Mary Brown, D-3rd, and Kenneth Whisenton, D-at large — have agreed with Washington and said developments are the best way to help the city. Washington expects that Gary won't immediately feel the effects of Senate Enrolled Act 1. Hammond Mayor Tom McDermott said in a text to the Post-Tribune that Hammond won't know the exact effects of Senate Enrolled Act 1 until the summer. Council President Dave Woerpel, D-5th, previously related Senate Enrolled Act 1 to the potential Lake County Convention Center project. The Hammond Common Council recently approved a resolution in opposition to the convention center project. Woerpel said it's dangerous to build a convention center when the state hasn't felt the effects of Senate Enrolled Act 1. 'How do you explain that in three to four years from now, that the state says we're going to be $8 million short towards our city budget?' Woerpel previously said. 'And the state says we can impose a city income tax.'
Indianapolis Star
21-04-2025
- Business
- Indianapolis Star
Lawmakers try to stop Fishers, Carmel rental caps ahead of city council votes, in 11th-hour move
Show Caption Carmel and Fishers' controversial plans to regulate the number of rental properties in their communities could be squashed by the Indiana legislature. In an 11th hour move, language to prevent local governments from putting caps on rentals was added on Monday morning to House Bill 1389, a bill limiting local governments ability to restrict vehicle and outdoor equipment sales. The language that would impact the Hamilton County cities wasn't discussed in committee prior to Monday's conference committee on HB 1389, during what's supposed to be the final week of the legislative session. The Fishers ordinance could be voted on at a city council meeting Monday night. 'It really fits in 1389 because we're talking about local regulations,' said Rep. Jim Pressel, who authored the legislation. '(It's) what units of government should be able to regulate and what they shouldn't frankly." Fishers officials have said its first-of-its-kind proposal is an effort to curb large corporate investors from buying swaths of single-family homes and converting them to rentals. Some homeowners and renters in Fishers have been joined by real estate interests in pushing back against the ordinance, which would place a 10% cap on the number of rentals allowed in a subdivision. In Carmel, the discussion is just getting under way. Carmel's ordinance would limit rental units to 10% of all homes within any subdivision or the City of Carmel as whole. That ordinance will be introduced at Carmel's city council meeting Monday night. Both city's ordinances would establish rental property registries. Brian Burdick, an attorney with Barnes & Thornburg, spoke on Fishers' behalf during Monday's conference committee. '(Fishers) has had an incredible problem over the last five or six years where a number of significant hedge funds have moved in and have purchased up nearly half of the homes in neighborhoods to turn into rental properties,' Burdick said. Fishers' ordinance is about preventing a barrier to first-time home buyers, who are getting outbid for homes by hedge funds, he added. 'There's a lot of constitutionality issues around the issue,' Burdick said. 'Our firm has drafted the ordinance with constitutional lawyers to get around this very issue and to balance property rights.' Amy Krieg, the government affairs director with Accelerate Indiana Municipalities, also spoke against the legislative add on. 'We aren't supportive of this language at this time, and it is important communities retain the tools to create cohesive and livable neighborhoods,' said Krieg, whose organization advocates for hundreds of Indiana municipalities. On the other hand, representatives of several interest groups spoke in favor of the legislative provisions that would stop Fishers' and Carmel's ordinance before they even took effect. 'As an organization, we have a longstanding position of supporting private property rights and we also are an inherently free market organization,' said Maggie McShane, representing the Indiana Association of Realtors. Families with young children and young people trying to save to buy a home would be impacted by the rental restriction ordinances, McShane said. Representatives from the Indiana Apartment Association and the Indiana Builders Association both spoke in support of adding language to House Bill 1389 that would squash Fishers' and Carmel's ordinances. "We from our standpoint believe this is bad housing policy,' said Brian Spaulding, president of the Indiana Apartment Association, of the Fishers ordinance. 'It's going to result in increases in the cost of rent overall when you're capping that supply.' A Fishers spokesperson said Mayor Scott Fadness was unavailable for immediate comment but was talking with legislators to sort out the implications of the General Assembly's action. Lawmakers from both chambers still need to sign off on the proposed final language in HB 1389, so the bill could still change before it crosses the finish line.
Yahoo
10-03-2025
- Business
- Yahoo
Small town spirit: How Indiana's rural communities are working to reverse population losses
In Corydon, the town is building a skate park and increasing walkability by connecting downtown to Rice Island Park. (Courtesy of Main Street Corydon) As Indiana anticipates slow population growth in the coming years, small cities and towns in rural Indiana are pushing forward with projects to attract residents and businesses to their communities. Growth over the next four decades is projected to be lower than it was in the decade between 2000 and 2010, according to Matt Kinghorn, senior demographer at the Indiana Business Research Center. More than 70% of Indiana's counties are expected to lose residents over the next 30 years, many of which are rural and also lost population in the 2020 census. 'And the counties that are growing quickly are generally taking population from other areas of the state. So it's not an overall net increase,' said Matt Greller, chief executive officer of Accelerate Indiana Municipalities (AIM). But small Hoosier communities aren't going down without a fight. Local businesses, organizations and governments are applying for grants, investing in quality-of-life projects and supporting small businesses to draw new citizens and spur economic growth. 'For a community to have the amenities that folks want these days, whether it's broadband or trails or a vibrant Main Street, you've got to have a coalescing of people to make that happen,' Greller said. Grants are crucial in helping small cities and towns in Indiana launch and complete initiatives. Community foundations, state entities and federal sources all play a role in funding local projects. For example, Boonville in Warrick County is working toward Indiana Accredited Main Street (IAMS) status after completing the Aspiring IAMS 1-year Program. '(Indiana Accredited Main Street) opens the door for more grant money, which is the key to doing just about anything that you want to do of significance. If you can't get grants, then you've got to do fundraising, and it's pretty hard to raise a million dollars in a town like Boonville,' said Jim Miller, executive director of Boonville Now. His group promotes the city's downtown. The city even hired a firm with a grant researcher dedicated to ensuring community leaders know about every possible funding opportunity. 'The idea was, 'Let's pay this company $50,000 a year, and we'll be looking at $100,000, $200,000, $300,000 grants per year.' Then it pays for itself,' Miller said. 'I've got spreadsheets of probably 20 things that they're working on.' Miller employs a location analytics software, to track foot traffic in the city, then uses the information to apply for grants. Janelle Amy, executive director of Main Street Corydon, a Nationally Accredited Main Street community, also plans to use data to attract local investment. Indiana University Southeast (IUS) is 'able to send some reports for us to be able to measure and see how many pings on these phones were coming through and being able to see those heavy spikes whenever we have those larger festivals, especially in our downtown, hoping that we're able to see that data year after year to see, 'Are we seeing continued growth? Should we focus our efforts elsewhere?'' Amy said. Another grant source, the state-funded Regional Economic Acceleration and Development Initiative (READI), has given hundreds of millions of dollars to economic growth projects across the state. The READI program is not in the current version of the state budget, according to Greller. 'I hate to see that go away because it's such an innovative thing that set apart Indiana, certainly in the Midwest and maybe the rest of the country. It is having a real impact on some of these rural communities,' he said. For small Hoosier cities and towns to survive, Greller said municipalities must be willing to fund projects that meet their residents' needs, particularly when it comes to quality of life. 'We live in a world where we all want lower taxes,' said Greller. 'But there are studies after studies that show once a government decides to make a formal investment in a community in a meaningful way, that typically has a snowball effect.' Miller said increased property tax values helped Boonville accomplish several quality-of-life projects. 'We've been able to take advantage of that and issue bonds to be able to build a new pool and to completely renovate the splash pad and the playground area and the basketball courts and things at City Lake,' he said. But property taxes are in the crosshairs at the Legislature. Greller emphasized investment in city and town parks as a key driver of economic growth in rural Indiana. '(Smaller parks) drive things like community events, farmers markets, summer concert series, hot rod festivals or whatever it is that wants to come to an individual community. Those kinds of investments have done well and created good returns over the years,' he said. Miller said Boonville is also focusing on historic preservation with the Mt. Liberty Baptist Church and School restoration project. In Corydon, the town is building a skate park and increasing walkability by connecting downtown to Rice Island Park. 'Being able to expand that further out … we've opened up a whole other level for people to be able to visit our downtown and hopefully shop and support and live here as well,' said Amy. When big employers leave small Hoosier cities and towns, residents often go with them. Corydon is looking to draw a new industry after Tyson Foods' closure last year affected nearly 370 employees. New Gov. Mike Braun's campaign included a plan targeting rural Indiana, and the current state budget proposal includes a tax credit to attract qualified private sector investors to raise and invest flexible capital into rural communities and help rural businesses to sustainably expand their operations. Greller said Gas City went through a similar situation as Corydon when the area was hit hard by the downturn in automobile manufacturing jobs. 'They pivoted. They made some strong investments in their community. They've seen an uptick in growth and population. They just built the performing arts center, which is a sign of things improving in those kinds of communities,' he said. In Boonville, two new establishments — a restaurant with catering service and a cigar lounge — recently opened in the historic district, according to Miller. 'What we're trying to concentrate on is bringing in more small businesses because we do have some empty spaces on the square and around the square,' he said. 'We don't have any more land to be able to give a bigger industry that wants to come in.' Thanks to city grants, Boonville entrepreneurs can apply for money to enhance building facades and revolving loan funds to make other improvements or start a business. Corydon also has a facade program funded in part by the Harrison County Community Foundation and a community collaboration fund created from a state grant. 'We were able to offer up to $5,000 to our downtown business owners for whatever initiative they needed at that time. So it could be purchasing new inventory, helping them with their marketing, Just whatever we could do to give them an additional boost to keep them here and hopefully support their initiative moving forward,' Amy said. Programs like Make My Move and Choose Southern Indiana offer remote workers incentives for relocation within the Hoosier State. However, Greller questioned how emerging return-to-office policies will affect these initiatives in the future. 'I'm interested to see what happens in some of these communities that have had success attracting those folks into their areas,' he said. Amy viewed new housing developments in Corydon and Harrison County over the past year as a sign of residential growth. 'I know of at least three additional apartment complexes within the Corydon area that are very close to downtown,' she said. 'And new subdivisions have been populating as well in Corydon and beyond.' Despite the efforts of small cities and towns in Indiana to remain independent, Greller said some areas that thrived on historic economic drivers may need to have some tough conversations. 'We have some small communities that were there because there was a grain elevator 150 years ago or there was a railroad stop 150 years ago. Does it make sense for the viability of the region they're in to continue to exist as an incorporated area? Maybe we ought to look at merging with other forms of government for the greater good,' he said. Federal funding cuts are also a concern regarding infrastructure projects and other initiatives in small municipalities. 'Many communities are fortunate to receive Economic Development Administration, (U.S. Department of Agriculture), Small Business Administration and other types of federal funding. I do believe that economic growth could be threatened if funding commitments from these federal agencies are halted abruptly,' said Darrell Voelker, executive director of the Harrison County Economic Development Corporation. To persist, Greller said small Hoosier cities and towns must get creative and maximize opportunities to ensure sustainability and longevity. 'We're going to have to take a close look at ourselves and make sure we're running as lean and efficiently as possible to make sure we have resources to invest in these types of programs,' he said. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
12-02-2025
- Business
- Yahoo
Tax reform proposals to cost municipalities, schools hundreds of millions in revenue
GOSHEN — Local elected leaders expressed fears of potentially losing hundreds of millions of dollars in revenue under tax reforms introduced by the state legislature this year. The organization that advocates for local governments in the state, Accelerate Indiana Municipalities, raised the alarm about the potential impact of Senate Bill 1 and other bills that would starve them of revenue without replacing it. Local governments, schools and libraries in Elkhart County stood to lose hundreds of millions of dollars in revenue under the bill as introduced – a countywide total of over $140 million between 2026 and 2028. 'If it passes as proposed, the projected loss of revenue to Goshen City alone is in the range of over $9.5 million over the next three fiscal years, which would be devastating for city operations,' Goshen Councilwoman Linda Gerber said Monday. 'I know Mayor (Gina) Leichty has been participating in meetings in Indianapolis to advocate on behalf of the city, and I think we as counsellors have a responsibility to do so as well.' An amended version of Senate Bill 1 that moved out of committee Tuesday morning scales back tax cuts for homeowners to $1.1 billion over three years. It's expected to cost local units of government just under $300 million in the first year, according to Sen. Travis Holdman, who authored the bill and introduced the amended version. As introduced, the annual impact on property tax collection would have grown from an initial $1.2 billion to $1.6 billion. The Indiana Office of Fiscal and Management Analysis had not released a revised fiscal impact statement that reflects the amended bill as of Tuesday morning. Gerber suggested passing a resolution expressing the city's opposition to tax cuts without a plan for revenue replacement. She drafted a resolution along with council members Brett Weddell and Megan Peel, which they said they would introduce at the Feb. 24 meeting after gathering input from others on Goshen Common Council. 'It seems kind of irresponsible of the governor to propose such a tax reduction across the entire state without offering up possible options to replace it,' Peel said. Similar resolutions were passed by Accelerate Indiana Municipalities, the Indiana Library Federation and the cities of Bluffton, Boonville and Cumberland. As originally proposed, the property tax reforms in SB1 would have caused revenue losses to township governments ranging from roughly $50,000 in Locke to $2.1 million in Cleveland, according to the state's projections. The impact on school corporation budgets included a total loss of around $16 million for Elkhart, $14 million for Goshen and $11 million for Middlebury. 'It would mean the only possibility is to cut personnel,' Councilman Phil Lederach said. 'There's no other way to replace that,' Losses for Fairfield, Baugo, Concord and Wa-Nee school districts ranged from $1.1 million to $2.7 million per year between 2026 and 2028. Libraries stood to lose hundreds of thousands of dollars in revenue as well, with Elkhart Public Library alone projected to see a total shortfall of close to $3 million. Elkhart County government would have lost a total of $27.2 million in revenue over three years. Commissioner Suzie Weirick said the revenue cuts as introduced posed a catastrophic risk to public safety as well as roads and infrastructure, which are facing a 40 percent increase in costs. 'Elkhart County is very concerned about the implications of the tax cuts proposed by the governor and the state legislature,' she said. 'While I hate paying taxes and do not want to pay more, I understand I want to use certain things like public services and infrastructure. ... If it is a matter of simply cutting services to cut cost, the state needs to give all local municipalities, cities and counties, the ability to cut services by reducing mandates. There is an increasing effort by the state legislature to demand the locals provide services without increases in revenue.' The office of Gov. Mike Braun issued a statement Tuesday afternoon saying the governor 'remains committed to delivering meaningful property tax reform that puts taxpayers first by providing immediate relief, capping future growth, and simplifying the process through reform and transparency.' The Senate Committee on Tax and Fiscal Policy has taken steps in the right direction, he said, '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.' '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,' the statement said.
