Property Tax Reform
Property tax reform was Governor Braun’s top priority during the 2025 Legislative Session and it manifested itself in Senate Enrolled Act 1 (SEA 1). The Governor’s introduced version of this bill would have been the most significant property tax reduction since the property tax caps of 2008 and would have been even more significant over time. Through session-long negotiations and advocacy from local government leaders, the final version of SEA 1 was still a significant property tax reduction. The vast majority of the property tax relief will be phased in over time and will be primarily for homeowners.
SEA 1 also included a total overhaul of the local income tax (LIT) statute moving it from a county-wide rate to a rate that can vary by municipality and allows some larger municipalities to adopt their own LIT rate. The new structure will be effective in 2028 and is creating uncertainty for local government planning and budgeting. Improving and clarifying this new process will be a top Aim legislative agenda item over the next two years prior to its implementation to ensure LIT distribution is fair and significant enough to overcome some of the property tax cuts in SEA 1.
A summary of SEA 1 can be found on page 45 of the 2025 Aim Statehouse Report.
Balanced Solutions Initiative
At the direction of 2025 Aim President and Mishawaka Mayor Dave Wood, the Aim legislative team initiated a multi-track response to the legislature’s adoption of SEA 1. The legislation has broad fiscal and structural implications for municipalities, prompting the Aim Board of Directors to launch a proactive planning effort to assess the impacts, identify solutions, and prepare for the 2026 legislative session.
The Aim Board of Directors charged staff with developing a comprehensive strategy addressing the fiscal, operational, and organizational consequences of SEA 1. The goal was to ensure that Aim’s advocacy and communications efforts reflected accurate, data-driven insights from across Indiana’s cities and towns, and that member feedback directly informed future legislative proposals.