INDIANAPOLIS (WISH) — An Indiana University professor and former mayor on Friday said most local governments would have very little money to spare if lawmakers approved a property tax overhaul.
Paul Helmke is the director of the Civic Leaders Center at the IU O’Neill School of Public and Environmental Affairs. He served three terms as the mayor of Fort Wayne from 1988 to 2000. Helmke said property tax revenue is crucial for local functions such as emergency services and street repair, in addition to funding schools. Unlike income taxes, he said property tax revenue is entirely local. The state doesn’t receive any.
Indiana homeowners have endured a massive spike in assessed values since 2021. Property taxes became the top issue in the 2024 gubernatorial election and Gov. Mike Braun has campaigned for a property tax cut ever since he took office. His tax plan has gone through a total of four iterations at the Statehouse to date. At a rally in support of Braun’s proposal last month, homeowners told News 8 their bills have risen by thousands of dollars, in some cases.
Helmke said those spikes are due primarily to a combination of inflation and rising assessed values. In an interview with News 8 for Sunday’s “All INdiana Politics,” he said his own property tax bill went up 15 percent even though his rate went down.
“It’s something you could argue, well, I’m wealthier now, my house is worth more, but again, the catch is, that doesn’t mean there’s more money in your pocket,” he said. “So that’s why there’s this push for property tax refrom. When your value goes up, that doesn’t give you more money to spend, so it’s harder to pay those property taxes.
Braun originally called for lawmakers to reset property taxes to 2021 levels. The current version of the plan instead allows homeowners to claim a credit of up to 10% on their total property tax bill, to a maximum of $300. Seniors on fixed incomes could claim an additional credit of $150 while disabled veterans could get an extra $250 credit. Those two credits could not be combined with each other. House Republicans also added a long-sought business personal property tax exemption and rolled in a separate piece of legislation that requires traditional public schools to share property tax revenue with charter schools.
The measure also caps local income tax, or LIT, rates at 2.9%, down from 3.75% in current law. House Republicans have said local governments would not raise LIT rates high enough to offset homeowners’ savings under the bill. Helmke disagrees. He said the vast majority of local government units in Indiana have LIT rates so far below the 2.9% cap they could make up the lost revenue and still remain below the limit. He said it’s very likely counties will take advantage of that.
“I think for most homeowners, it’s probably going to be a wash. Because if you own a home, you could see a $300 tax reduction. Maybe not next year but in the next 2 to 3 years, you’re going to see an income tax hike that’s more than that,” he said.
Gov. Mike Braun late Thursday said he looked forward to signing the bill in its current form.
That would require the Senate to concur with the House’s package rather than send it to a conference committee, where the bill could be rewritten yet again. A motion to concur has already been filed and SB1 is listed on the Senate’s concurrence calendar for Monday. Senate President pro tempore Rod Bray, R-Martinsville, on Thursday indicated he would prefer to concur and send the bill to Braun.
“I think we’re for sure talking about it as a caucus. We’ve been looking at it very closely, our caucus members have, looking at some runs and making sure they understand how it affects their communities and so we’ll continue to talk about it over the weekend,” he said. “But it’s my strong hope that we’ll be able to concur.”
“All INdiana Politics” airs at 9:30 a.m. Sunday on WISH-TV.
SB1 offers meaningful tax relief for Hoosiers. The plan to CUT, CAP, and REFORM means relief now and systemic changes for the future to protect taxpayers. Thank you to the House for their hard work and I look forward to the Senate sending this to my desk for signature next week!
— Governor Mike Braun (@GovBraun) April 10, 2025