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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowRepublican mayoral candidate Jefferson Shreve this week rolled out a proposal to freeze property taxes in Indianapolis for residents older than 65 and those seeing drastic increases in assessed home values.
Shreve first introduced the proposal in an IBJ op-ed Friday. His campaign sent out a press release elaborating on the plan earlier this week.
The candidate proposed creating a “Freeze Fund” financed by the city’s bond bank, which would pay back annually the property taxes lost due to the freeze.
Eventually, homeowners would have to pay back the funds at the sale of the home.
Shreve said the program would help those “victimized by rising assessed property values” and make “it possible for seniors to stay in the neighborhoods they have loved and been part of their whole lives.”
The median assessed value increase from 2022 to 2023 for a single-family homestead in Indianapolis was 17%, according to Marion County Assessor Joseph O’Connor.
Under Shreve’s plan, taxes paid by the fund would be tracked over time. When the home is sold, sellers would pay that amount back into the fund. In a case in which a homeowner dies or a home is gifted, the amount would still need to be paid when the house is sold, Shreve said.
Shreve told IBJ there would be no income or home value limits, but a home-equity value would likely be required to be at 30%.
He described the program as “innovative,” and said it is not modeled after any programs in other cities.
An example provided by the campaign uses a home with an assessed value of $223,000 with property taxes frozen at $2,676. Assessed values increase 20% in the first year of the program and 15% more in each of the next three years before stabilizing at an increase of 2% per year.
The example says that when the home is sold 19 years later for $547,750, the seller pays back $72,676 and walks away with $475,000.
An expert in tax policy told IBJ the proposal still lacks important details.
Stephanie Wells, president of the Indiana Fiscal Policy Institute, said she came away from reviewing the policy with a lot of questions. Among them was the starting point for the municipal bonds used in the freeze fund.
Shreve said the amount of bonding could not be determined until the program is put in place, because it cannot yet be known how many people would opt-in.
Wells said that information is needed to determine whether such a program is worthwhile, especially where bonding could support other developments and initiatives.
Because the program has no sunset, it would require staff to constantly enroll individuals with increasing assessed values and senior citizens, Wells said. It would also entail managing the freeze fund and somehow working to regain funds when homeowners sell, she added.
“This would be a complex program to manage,” Wells said.
Shreve said the program should be able to operate out of the Marion County Assessor’s Office without issue.
Wells said several states and municipalities have implemented tax freezes for the elderly, but most of them have chosen to offer complete forgiveness of the lost property tax revenue. Shreve’s proposal differed because it would attempt to take back those lost funds.
Shreve’s proposal came in the final days of the election cycle, with Election Day looming on Nov. 7.
Tax issues have played a role in previous Indianapolis mayoral elections. In 2007, former Democratic mayor Bart Peterson was upset by Republican Greg Ballard after Peterson hiked local income tax rates to raise revenue to pay for public safety and pensions.
Hogsett campaign spokesman Blake Hesch said in a statement that the mayor “has led from the front in addressing higher property tax burdens.” He pointed toward recent tax-relief programs. This spring, 90% of Marion County homeowners received a property tax credit of up to $150. The Hogsett administration also passed an anti-displacement pilot program for residents in the Riverside neighborhood in the 2024 budget.
“Shreve’s half-baked scheme would jeopardize the City’s AAA bond rating with the Trump-style playbook of borrowing money to cut taxes,” Hesch said in the statement. “It’s clear Jefferson Shreve has no idea how public financing works.”
Shreve denied that the program would impact the city’s bond rating.
Correction: An earlier version of this story incorrectly said homeowners with a home equity value of at least 70% likely would qualify for Jefferson Shreve’s proposed property tax “freeze.” That information came from the Shreve campaign’s written outline of the plan, which the campaign said was also incorrect. Qualifying homeowners likely would need a home equity value of at least 30%. See all of our corrections here.
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Shreve’s ideal world of more car infrastructure along with a property tax freeze = low density, low income, and failing city infrastructure.
What a way to ensure that Indianapolis goes broke. Populist nonsense for the suburbanites.
I know his plan technically defers taxes, but that is still terrible.
It will eat away at equity for Indy’s most vulnerable home owners, preventing wealth building. It also doesn’t scale with inflation, leaving the city shortchanged in the long run.
Shreve’s plan for homeowners is just a personal summarization of what the Marion County Republican vision for Indianapolis is. Why fix a problem when you can stick your kids or grandkids with it?
You do know that Indianapolis is mostly suburban, correct?
Gtgoh
It’s not modeled after any programs anywhere else because it’s a horrible idea!
All interesting comments. Seems to be the position of many that have commented….let’s just leave the most vulnerable to solve the problem and if they can’t too bad. Under Hogsett, some of the most vulnerable in our community are at risk of losing their homes. Robert H. it may eat some equity…but given the assessed value is tied to the perceived value of the home…those that benefit from the plan should have significant equity and can use a small portion to repay deferred excess taxes upon a sale. There is certainly work to do to ensure the plan helps the most vulnerable, but it is better than anything Hogsett has done.
Indianapolis deserves better than Hogsett. It is time for a change.
The most vulnerable in our community can’t find housing. This is just a kindler, gentler reverse mortgage.
Patrica – Shreve is throwing random things at the wall trying to find something, anything that people will care about. Keep the heliport open! Replace IndyGo with Uber! Open the circle! I’ll pick up your leaves!
Meanwhile he’s got a 10 million dollar loan to his campaign that’s just waiting for donors to contribute to … in order to pay him back. And how would Shreve pay those donors back? You think whoever gets picked to run that IndyGo replacement won’t be a campaign contributor?
I’m all for a change. Jefferson Shreve is just going to be a return to crony politics while donors get rich and taxpayers get stuck with the bill, like Ballard selling off utilities and parking meters.
The current mayor must be doing something right if everyone is being “victimized” by rising home prices in the city.
In the race for City County Councilor, one democratic candidate made a very good case for more funding and scrutiny in the assessors office, where real data does support the idea that we have an actual problem with regressive taxing. It turns out that about 80% of low value properties are over-assessed and 80% of high value properties are under-assessed.
And Joe has had eight years to focus on issues like that. Time for a change.
Correct!! We All know it.
And did you know before I told you, how regressive our Indy property taxes are? Maybe the Mayor has read the study by the University of Chicago, but I doubt it.
What Patricia said is spot on. The status quo is killing Indianapolis.
It is jst amazing that an “innovative” idea comes out a few days prior to the election. In all of the ads we have heard about plans, plans, but nothing concrete ever came about. Just criticism. Wow, he finally thinks???
There are many problems, but many take much more than just the mayor to solve. We have made a lot of progress in the past 8 years and must be thankful for that also.
There is a lot to “thank” Joe for…four years of murder rates over 200, homicide solve rate that has fallen from 80% when Joe took over to 35% now, deplorable animal shelter and so many other signs of failure.
As for plans…Shreve has a great record during his city council time, built a very successful business based on his vision and has given back to so many important causes in Indianapolis because he believes in his hometown. He is now utilizing what he has learned and outlining a vision for the city.
Joe on the other hand has had eight years but more recently started releasing some plans based on reactions to what Shreve has pointed out. And yes he released other “plans” over the years (e.g. his plan to end homelessness, his plan for a new animal shelter) but they have failed.
It is time for a change!
Shreve was twice appointed to the Council to replace resigning elected officials and served around 4 years total.
Name for me one thing he did while on the Council.
I’ll wait.
Shreve’s proposal is fraught with all sorts of potential pitfalls for homeowners. The most serious is the possibility that assessments drop, and the future sale price is too low to pay back the deferred property tax. Then what? Shreve complains that Mayor Hogsett uses tax dollars to fund all sorts of things that ought to be paid for by private dollars, but at least Hogsett is using tax dollars to invest in a better city that benefits all citizens with actual returns on those investments. Shreve, on the other hand, would use tax dollars that favor few at the expense of many with no real return.
You clearly have not read the plan. You are absolutely incorrect about Shreve’s plan and how it would work. The bonding of the deferred taxes puts the cash in the cities coffers and does not reduce the ability to use the dollars.
It’s Hogsett’s mismanged of TIF money that puts the city in fiscal peril.
It is time for a change.
The amount of revenue that Indianapolis can collect is largely controlled by state legislators, who control what taxes can be levied by local governments while also controlling what revenue is returned to local governments.
I know with road funding that Indianapolis doesn’t get back what it contributes with gas taxes. It would not surprise me if Indianapolis subsidized the state with other taxes.
When it comes to things like gas taxes, Shreve has already said he isn’t going to fight for more money at the Statehouse, he’s just going to be more “innovative” with fixing potholes, which is like claiming you’re going to balance the federal budget by eliminating fraud and waste.
Why not simply freeze their property tax. period. Why the payback? Why complicate it?
I agree, but the City/State needs property tax for infrastructure, education, fire/police, etc. The money is still needed. Deferring is only going to cause confusion when sold.
Because the city does need the $$ to support its budget and investment.
Shreve needs to move out of state. Weirdo