INDIANAPOLIS – Amid the rise in assessed home values, Indiana lawmakers may approve property tax relief this session.
Republican state lawmakers have said the issue has been one of their top concerns this year.
“We know that homeowner tax bills have gone up quite a bit, and we believe they’ll go up again next year,” said State Rep. Jeff Thompson (R-Lizton), who chairs the House Ways and Means committee.
Thompson introduced House Bill 1499, which would offer several forms of property tax relief, including a temporary reduction to Indiana’s 1% cap on residential property taxes.
The bill would lower the cap to 0.95% for taxes first due and payable in 2024 and 0.975% for 2025.
“It will help those homeowners and not have such a large increase,” Thompson said.
The bill received almost unanimous support from the House and has been sent to the Senate for consideration.
State Rep. Ed DeLaney (D-Indianapolis) supports the proposal but argues Indiana’s property tax system needs long-term change.
“Put simply, our 1% property tax cap, our system is showing its age,” he said at a news conference Monday.
One of his suggestions is to have the state cover more funding for schools.
In Indiana, property tax revenue goes to schools and local government agencies.
“The taxes could be used if we relieve the pressure on the schools by giving them more taxes from the state, more revenue from the state, that would create funds to fix things like roads and hire police,” DeLaney said.
Thompson said he and House Republicans will look at possibilities for long-term change in the future.
Meanwhile, local government officials say they’re concerned about their biggest source of revenue taking a hit over the next two years if lawmakers lower the property tax cap.
“We might be open fewer hours,” said Republican Mayor Dan Ridenour of Muncie. “We might not have as many streets paved.”
Property taxes make up 65% of the funds his city collects, Ridenour said.
“This was being thrown on us without any advance warning and therefore we may have negotiated contracts and/or salary increases that will now be very difficult to pay,” he said.
“It’s going to be a decrease in the increase,” Thompson said in response to those concerns. “We’ve had a huge increase, and so we’re going to decrease part of that increase.”
Indiana lawmakers are also moving forward with Senate Bill 3, which would create a commission to study all of Indiana’s tax laws and consider possible changes.