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The Senate on Monday approved a property tax relief bill that Republican leaders have labeled a priority but that quickly drew the ire of Republican Gov. Mike Braun.
As introduced, the bill included most of the property tax plan Braun introduced during his campaign and after his election. But after an outcry from local officials, a Senate committee stripped the bill of many of those provisions and changed the bill to one that limits the growth of total tax revenue but does less to direct cut individual tax bills.
After passing the Senate 37-10, Senate Bill 1 now moves to the House, where senators said they expect the bill to be amended.
“There’s a lot of things the House will probably change,” Sen. Dan Dernulc, R-Highland, said before the vote.
Braun said he’ll insist on it. In a statement posted on X Monday night, the Republican governor said the bill now lacks relief for the homeowners hit the hardest by higher tax bills. And he said the legislation only slows down how property taxes will grow in the future.
He was also critical of complaints from local government officials, who have said that significant cuts in property tax revenue will force them to cut services.
“This bill has a long way to go before it gets my signature, and restoring meaningful tax cuts would be a step in the right direction,” the post read.
As SB1 moves to the House, I want to be clear on a key point—a real tax cut means taxpayers keep more, and government takes in less. SB1 doesn’t cut taxes for homeowners hit hardest by skyrocketing assessments since 2020—it just slows down how fast their bills will increase next…
— Governor Mike Braun (@GovBraun) February 17, 2025
The bill’s tax relief comes primarily from limiting the total amount of property tax revenue that local governments and schools can collect. The amended bill would freeze that amount—called the property tax levy—for 2026. Levies could then increase 1% in 2027 and 2% in 2028. The legislation also changes the formula that would determine the annual growth in tax levies after 2028.
The maximum growth allowed in levies under current law is expected to be 5.7% in 2027 and 5.3% in 2028, according to the bill’s fiscal note. Last year, lawmakers established a 4% cap on growth when it could have reached up to 5.5%, according to the Indiana Capital Chronicle.
After 2028, the formula to determine levy growth would become county-specific and would take into consideration personal consumption expenditures, average annual pay in total for all Indiana industries, and U.S. non-farm business labor productivity.
The bill also adjusts income and assessed value limits for the over-65 deduction and creates a new homeowners tax credit. It allows a county to adopt a property tax payment deferral program. And if a local government or school seeks to pass a referendum, it must include the total levy increase. Also, those referendums could take place only during the general election in a congressional election year.
A few Republicans and Democrats said the bill isn’t in the place they want it for final passage. But they said they voted yes keep the legislation moving so they could try to address an outpouring of constituent concerns.
“I think we could do better. I think it would be a very complicated process, but I think we could do it,” Sen. Mike Gaskill, R-Pendleton, said. “And I would just like to encourage us to, after passing this bill and getting the most we can get right now, to find ways to make sure that we don’t get in this predicament again.”
When the bill was introduced, it included the full breadth of Braun’s tax proposals, including expanded homestead deduction and 2%-3% tax caps on the annual increases in tax bills. However, a Senate fiscal committee, chaired by the bill’s author Sen. Travis Holdman, voted to strip that language and amended three other property tax bills into it.
Holdman said Monday he is continuing to work with the Governor’s Office and the House on the bill.
Since Braun debuted his tax plan on the campaign trail, local government and school leaders have expressed unease about how municipalities could make up the lost revenue and maintain government services. Property taxes are a primary mechanism to fund local government and schools.
Several local government leaders warned the Senate committee on Feb. 4 that Braun’s bill would harm critical services and pushed back against assertions that local governments could heavily curb spending without significant service cuts. Braun’s proposals could have resulted in at least $1.2 billion in property taxes cuts—and therefore reduced revenue for local governments—in 2026, according to the bill’s initial fiscal note. That reduction in local government revenue was expected to compound each year.
The current bill, instead, would reduce property taxes—and therefore reduce local government revenue—by about $1.4 billion over three years, according to the bill’s fiscal analysis.
“I am open to a discussion balancing the cost pressures from inflation on local government services with tax relief for homeowners,” Braun said on X, “but we can’t lose sight of the fact homeowners have been crushed by inflation in assessed values while local governments have seen a windfall in revenue well beyond inflation.”
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This story is much better if it includes a roll call. Actually, that should’ve bene in the first three paragraphs.
If you click the link for “Senate Bill 1” it goes right to the site where you can find the results.
We need Elon Musk to come and look at our local government records and I’m confident he could find plenty of waste to alleviate the naysayers concerns about reducing property taxes!
The issue is we keep re-electing the same old legislators and expect different results.
Joe, you feel the same about the Indy City Council, right?
The person I keep voting for doesn’t win there either, Chuck … but the Republican winner did tell me not to blame the mayor for the car-eating pothole outside my house, call my state legislator because the state is shorting the city money. Wild, huh?
5%+ growth in levies? How many people get 5%+ growth in income each year? Typical politicians; squeeze the populace till they’re dry. Some pol’s relative always needs a fat city contract; the citizens be damned.
Sigh. Property tax is “ad valorem”, which means “based on value”. The Indiana Supreme Court, about 25 years ago, ruled that the “value” must actually be based on MARKET value (i.e. what you could sell your house for).
Your property tax only goes up 5% if your property VALUE goes up 5%, which means your net worth/wealth goes up because your mortgage (if you still have one) doesn’t go up. If you can’t afford to stay in your expensive house, sell it and buy a cheaper one with lower taxes.
Chris is absolutely right in his comment. But there is more to the story. Indiana is lauded for its “affordable” housing, with a median value of $260,000 (meaning half of all owners of a single-family home pay less, and half pay more) and an average value of $239,185 (67-percent of the national average). If these numbers don’t scream “affordable,” I don’t know what price would. Because Indiana household income is 11% below the national median, housing prices are artificially low so most Hoosiers can afford to own their own home. Finally, owning a home is not a “right,” but a privilege. As we saw in the 2007-2008 housing crash, most people thought they could afford a home but, when factoring in all the related costs of ownership, were struck with the reality that they couldn’t. While Chris recommends buying a cheaper home with lower taxes, I would recommend renting if you can’t afford the mortgage, insurance, taxes, and maintenance that comes with ownership.
Rest at ease, local government leaders in Indianapolis and surrounding communities. With this bill you can continue to build your K-12 school shrines, basketball and hockey arenas, entertainment centers, hotels, all those things that should be a priority of local government. Meanwhile, property owners will work two jobs, cut back on spending in all areas of our life, and all so the wealthy benefit from the facilities we build for them listed above!
It’s crazy that you can actually vote against these people if it bothers you so much.
Local government responds to what citizens want. That’s why the people who stay in Indiana are moving to Indianapolis and the surrounding counties – they want to live there, and they’re willing to pay more to do it.
If you want to pay less, there are large chunks of Indiana in which you can get a cheap house … because no one wants to live there.
Perhaps it’s time to review and implement the recommendations of the Kernan-Shephard report.
+1.
Wait until Braun finally figures out that it’s pretty simple to overturn a governor’s veto in Indiana.
Came here to say exactly that. Unless he strong-arms enough legislators into changing their vote, the same simple majority that voted for the bill will vote to override his veto.
The Indiana Governor’s veto is absolutely pointless.
As usual, Indiana is in good company when it comes to such a futile process for their governor to exercise their veto power. The only others are, AL, WV, KY, TN and AZ.
Some people will never learn that tax cuts have destroyed our police forces, public schools, roads, public utility infrastructure/maintenance, welfare services and more. But without those problems GOP would have nothing to blame on the Democrats.
It’s as if Sam Brownback and “The Kansas Experiment” never happened. (Google it) But if I recall correctly, it did result in a Democrat winning the governor’s office there for the last two terms.
Let all seniors live in IN without paying any taxes!
Go to Florida if you don’t want to pay taxes.
We are socialists here