11-04-2025
Marion County schools bracing for property tax overhaul
Marion County school districts stand to lose millions under the House Republicans' property tax reform proposal, which was amended yesterday to cut even more.
The big picture: Lawmakers have struggled to strike a balance between relief for homeowners who say they're struggling to keep up with skyrocketing property tax bills and the local units of government — cities, counties, school districts and more — that rely on those tax dollars to fund essential services.
Driving the news: House Republicans amended Senate Bill 1 this week to give the average homeowner a $300 credit toward their property tax bill next year — more than the $200 credit they introduced last week.
It also includes new credits for veterans and seniors, saving taxpayers more than $1 billion over the next three years.
House Speaker Todd Huston said the bill ensures most homeowners will pay less next year than this year, while controlling "unsustainable" local government spending.
Yes, but: The new SB 1 also gives municipalities a tool to offset those losses — the ability to raise local income taxes.
"This plan encourages local governments to raise their local income tax rate, so you'll get more money in your right pocket but have to pay more out of your left," said Rep. Greg Porter (D-Indianapolis).
State of play: Most local units of government will still bring in more property tax revenue next year than they will this year, just less than they would have without SB 1.
Without the bill, revenue is projected to grow by more than 5% next year. With it, that growth slows to less than 3%.
Under the earlier proposal, Marion County was projected to take in $50 million more next year than it will this year, but that's about $20 million less than it would have without SB 1.
A new fiscal impact based on the larger credit adopted yesterday hasn't been released yet.
Zoom in: The effect on schools would be wider ranging and likely to grow with the larger credit.
Under the smaller credit, the county's 11 public school districts would see property tax revenue growth between 1% and 4% next year.
Two districts — Wayne Township and Beech Grove City Schools — are projected to see year-over-year losses by 2028.
What they're saying: Beech Grove superintendent Laura Hammack said she is "profoundly concerned about the long-term implications" of SB 1.
"These reductions could force incredibly difficult decisions that may affect staffing, student programs and overall day-to-day operations," she told Axios. "Our ability to attract and retain talent, maintain safe and functional facilities, and offer opportunities that enrich student learning will all be jeopardized."
Washington Township Schools are projected to receive at least $10 million less over the next three years than they would have taken in without SB 1.
"Districts may need to revisit previously planned operations, capital improvements and other strategic initiatives to align with more modest revenue growth expectations," said Ellen Rogers, spokesperson for Washington Township.
The new version of SB 1 also incorporates language from Senate Bill 518, which would require districts to start sharing some property tax dollars with charter schools.
An Indianapolis Public Schools preliminary analysis of the bill said it will cost the district nearly $100 million over the next seven years.
The other side: Charter school advocates say all public schools should be funded equally.
What's next: The deadline for Senate bills to pass out of the House is Tuesday.
The Senate will need to vote on the changes made in the House, but Senate President Pro Tempore Rodric Bray (R-Martinsville) told reporters last week he thinks his caucus will support them.
