LTE: Passing meaningful property tax relief

Submitted for use on: March. 10, 2025
Word Count: 563

LTE: Passing meaningful property tax relief

By State Sen. Scott Baldwin (R-Noblesville)

Recently, the Indiana Senate rolled out our property tax relief package, which contains historic growth-control measures and is projected to provide $1.4 billion in property tax relief for Hoosiers over the next three years.

We understand the frustration voiced by many Hoosiers who are experiencing substantial year-over-year increases in their property tax bills, largely caused by inflationary increases in property assessed values. An important aspect when considering these types of tax cuts is that property taxes are set and used at the local level, so it is critical we find a balance that meets the needs of both the taxpayers and the budgets of schools and local governments.

As an author of Senate Bill 1, I believe the Senate Republican property tax relief package is offering a strong plan to provide property tax relief for all Hoosiers – especially homeowners – while maintaining a fair balance with the budget realities of local governments.

Noteworthy relief efforts featured in the current version of SB 1 include:

• Homeowners over 65 years old with an income under $60,000 for single homeowners (or $70,000 for joint filers) and in homes valued at less than $300,000 receive an increased deduction amount. These income and value levels will be indexed to growth in the economy.
• Disabled veterans in homes valued at less than $300,000 would also receive an increased deduction amount, with the home value level indexed.
• First-time homebuyers with less than $75,000 of household income in a home assessed at less than $250,000 will receive a credit such that they would pay little to no property tax on the dwelling for the first five years. The only exception is voter approved referendum.
• Local units’ operating spending is flatlined for 2026 at the 2025 level. This will limit the total amount of money collected by local governments.
• Capital projects referendum debt will be subject to a one year cooling off period for renewal.

I believe these are wins for Hoosier taxpayers that will not create unintended difficulties by severely cutting local budgets. The original version of SB 1, which reflected a proposal from Gov. Braun, would have cut property taxes more, but it might actually lead to an unfavorable shift in taxes for ordinary Hoosiers.

The governor's plan would reduce local governments’ ability to use property taxes to pay off debt for capital projects, bridge and road improvements, and sewer and utility infrastructure projects. However, that debt would still need to be paid off somehow, so the only recourse for local governments would be to increase the local option income tax.

Large businesses and corporations pay local property taxes, but they do not pay the local option income tax. If local governments shift their tax burden from property taxes to the local option income tax, it would increase taxes on households and small businesses while reducing taxes on large businesses.

This tax shift could be substantial. The current local income tax rate for Hamilton County is 1.1%, but local officials are allowed to increase that rate to a maximum of 3.75%. If Hamilton County maxed out its local income tax rate, it would represent an almost 241% increase which would be roughly $694 million.

SB 1 is still moving through the legislative process, meaning the language of the bill could change. No matter what, I am committed to passing meaningful legislation that will provide real property tax relief for all Hoosiers.

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State Sen. Scott Baldwin (R-Noblesville) represents Senate District 20,
which includes Noblesville, Carmel, Cicero and unincorporated areas of Hamilton County.
Click here to download a high-resolution photo.