INDIANAPOLIS — A proposal aimed at lowering property taxes for homeowners in Indiana is sparking controversy at the State House.
Governor Mike Braun campaigned for this policy, which gained support from many homeowners.
However, local cities and towns are raising concerns that the legislation could adversely affect their public safety operations.
Indianapolis homeowner Larry Cooper, a retired firefighter residing in Irvington, expressed his frustration with rising property taxes. He testified in support of Senate Bill 1 during the Senate Tax and Fiscal Policy committee on Tuesday.
"I'm looking at property now in Alabama or Tennessee," Cooper said. "I'm looking to move within the next six months when I sell my parent's home and my home. I'm gone, and taxes are the big reason."
Senate Bill 1 is Governor Braun's proposal to reduce property taxes for Hoosiers. For homeowners like Cooper, he says the burden of increasing taxes has made his retirement more stressful.
"You save to make sure that you can live a comfortable lifestyle," Cooper said. "But now you are contemplating work just so you can stay in your home that you own. That the government is taxing you for."
Senate Bill 1 proposes several measures for homeowners, including an increased homestead exemption. It would also cap property tax rates at 2% for seniors and growing families, and at 3% for other residents.
Local officials, however, are worried about the implications of this legislation on their budgets.
Terre Haute Mayor Brandon Sakbun said, "We would have to look at cutting personnel by 10 to 15%. Keep in mind in the city of Terre Haute, we are already reducing our total amount of personnel. Any person we do bring in, it's because we are getting away from a privatized contractor that's costing our taxpayers more."
Sakbun's concerns were echoed by Carmel Mayor Sue Finkam, who testified before the committee.
"As currently written, it would negatively impact the budget by $26.1 million or a 27% reduction. That is going to impact every single service," Finkam said.
Governor Braun stated that he is open to discussions about the challenges local governments face but emphasized the need for accountability.
"All of them are saying that they can't do without what they have now. I would say prove it," he said.
The proposed bill also includes restrictions on referendums for special projects and school tax levies, limiting them to general election years.
Senate Bill 1 is expected to undergo amendments and a committee vote next week.
The Indiana Chamber of Commerce also weighed in on the proposal. It's not something the organization opposes they do feel that the current proposal needs some work. You can see their full statement below.
The tax conversation is an important one and why the Indiana Chamber commissioned a two-part study last year to assess the state’s tax landscape and then to offer practical recommendations. The Indiana Chamber wants to help develop reforms that are equitable and support long-term economic growth. With respect to property taxes and Senate Bill 1, we look forward to working with lawmakers and the Braun administration to prioritize transparent reforms that balance relief for all taxpayers with the need for strong, sustainable communities.
