Gubernatorial candidates advocate cuts in property taxes, spending in second debate

Republican U.S. Sen. Mike Braun, Democrat Jennifer McCormick and Libertarian Donald Rainwater agreed during a gubernatorial debate Thursday that property taxes are too high and state government spending needs trimming. But they differed on the extent of cuts needed to reign in spending. 

The candidates are reacting in part to property tax bills that increased an average of about 18% for homeowners between 2022 and 2023, according to an analysis by the Association of Indiana Counties and Policy Analytics. That’s in part due to the increase in home values overall. In addition, heading into Election Day on Nov. 5, polls show the economy continues to be a top issue for voters in Indiana and nationwide.

So during the second of this week’s back-to-back gubernatorial debates—this one hosted and aired by WISH-TV Channel 8—the candidates dove further into financial issues, specifically talking about how reducing property taxes and state government’s reach would result in more savings for Hoosiers. 

While the candidates have previously released specifics about their plans for property taxes, which generally fund local governments, they haven’t offered details about how they would cut spending by state government.

Braun and McCormick also discussed a number of more specific fiscal policy details, including raising the minimum wages and funding infrastructure, on Wednesday night during a debate that aired on WXIN-TV Channel 59 and WTTV-TV Channel 4.

Voters will have one final televised opportunity to hear from the candidates on Oct. 24 during the Indiana Debate Commission’s debate. 

Next Monday is the deadline to register to vote. Early voting begins Tuesday. 

Cutting property taxes

All three candidates agreed Hoosiers’ property tax burden needs to be reduced but disagreed on the extent to which they could cut taxes while still funding essential services.

Braun’s plan—released in July—would cut property taxes immediately and then limit their growth. For owner-occupied homes assessed at $125,000 or more, the assessed value would be reduced by 60% before it is multiplied by the tax rate to determine the final bill. Homes assessed at less than $125,000 would first have their values reduced by $48,000—the current standard deduction—and then by an additional 60%.

Braun said Thursday that the changes would reset property tax bills prior to when they “went out of control,” which he has previously said is 2021. 

Braun’s plan would also cap the percentage that tax bills could increase in the future. For homes owned by seniors, low-income Hoosiers and families with children under 18, tax bills could increase no more than 2% annually. Increases would be capped at 3% for everyone else.

“It’s a plan that will work into the future,” Braun said.

During Wednesday’s debate, the moderators questioned Braun about how he would pay for the proposed cuts (in the past, state government has often reimbursed local governments for major cuts to their revenue). Braun said government at all levels can reduce inefficiencies and streamline government, creating savings that will fund the property tax cuts. He did not offer specifics.

McCormick said her plan for cutting property taxes pulls together the best ideas offered by Republicans and Democrats over time, resulting in a plan that provides tax relief while still funding local government services adequately. She has criticized Braun’s plan, saying it would defund necessary services.

“We don’t want to defund the police and our schools and our libraries and our parks and our fire,” she said Thursday.

McCormick has proposed capping annual increases in individual tax bills to 10% (not including when voters approve school referendums that increase taxes) and expanding tax credits for older Hoosiers, disabled veterans and renters. 

Throughout the debate, Rainwater was bullish on his property tax plan and reflected back on it numerous times while on other topics. He proposes capping property tax bills at 1% of the purchased price of the property or assessed value, whichever is lower, for a maximum of seven years. 

“I’m just a hard-working Hoosier who is sick and tired of watching the federal government, the state government and local governments run by Republicans and Democrats, take, take, take more and more of my money and your money,” he said in his closing statement.

Changes in property tax policy would need approval from the Republican-controlled Legislature.

Reducing the size of government

The candidates also agreed that the state government should be audited to identify inefficiencies and overspending. For Braun and Rainwater, curbing government spending would be critical to achieving their tax cut goals. 

In fact, shrinking government spending has been a cornerstone of Braun’s campaign. He called trimming state government spending “easy to do” and compared it to the work he’s done with his own company, 

“A lot of [state agencies] have not had the thorough management,” he said, adding that officials need to ask: “Do we need every employee there?’” and “Are we spending the money correctly?”

Braun released an inflation reduction plan this week including more specifics. He proposes a comprehensive regulatory review to identify costly requirements and their impact on Hoosiers, outcomes-focused metrics for each state agency, governor-conducted agency performance reviews, and the elimination of unnecessary or underperforming positions and programs, which would be revealed during an audit.

McCormick said that she is the only candidate who has run a state agency; she served four years as the state superintendent of public instruction overseeing the Department of Education (the position was elected at that time; it is now a position appointed by the governor). She said she would review all state agencies as she did the education department n and encourage more inter-agency collaboration to reduce redundancies. 

“We went in on that transition, and our team did a lot of interviewing and reviewing to see what programs were working, what programs were not, where we were lean and where we were heavy as far as staffing,” she said. “I would do that with every single agency.”

Rainwater said the state needs to do a better job identifying money that is “flying out the back door.” As governor, he said he would review bad contracts and overpayments, mentioning specifically the $1 billion Medicaid shortfall as an example.