FEBRUARY 14, 2025

On Tuesday, February 11, SB 1 was amended with almost entirely new language, making previous summaries of the bill obsolete. While the amended version of SB 1 is certainly movement in the right direction, we have more work to do. We appreciate the efforts of Senator Travis Holdman, chairman of the Senate’s Tax and Fiscal Policy Committee. We look forward to working with Senate and House leadership, Governor Braun and his legislative team in the weeks and months ahead to develop a solution that is both workable and balanced.

  • View the updated talking points to understand and communicate key concerns with your lawmakers, explaining the consequences of failing to replace any lost revenues resulting from SB 1, HB 1402, and any other measure that removes vital funding from city and town budgets.
  • Complete the request for information form to help us demonstrate how municipal governments allocate property tax dollars and how revenue loss would negatively impact public services. Return the form as soon as possible to Kyle Lubelski at klubelski@aimindiana.org.
  • Consider passing a resolution with your governing body to oppose property tax reductions without a sustainable replacement. Sample resolutions are available. If approved, please send your resolution to Erin Jamison-Koenig at ejamisonkoenig@aimindiana.org.

The Big Issues

PROPERTY TAX REFORM

  • SB 1, the bill containing Governor Braun’s property tax reform package, was amended extensively in the Senate Tax and Fiscal Policy Committee on Tuesday.
  • The original expansions of the homestead deduction, resetting tax bills back to 2021 levels, and new property tax growth caps were all removed. This was a significant improvement over the introduced bill and reduced the projected fiscal impact on local units by more than half.
  • Many new property tax reform and reduction provisions were added to the bill. Notably, the bill caps the MLGQ at 0% in 2026 phasing to 2% in 2028 and then uses the SB 9 MLGQ formula going forward. This is the largest fiscal impact in the bill resulting in $688M impact on local government budgets in the first three years alone.
  • The bill also removes the three-year growth appeal for excess levy appeals and replaces it with a cumbersome one-year special operating referendum to exceed the MLGQ in any year. Excess levy appeals are the only tool growing communities have to keep their tax levy growing with growing service needs and replacing this tool with rolling referenda is not feasible.
  • SB 1, authored by Sen. Travis Holdman (R-Markle), passed the Senate Tax and Fiscal Policy Committee with a vote of 10-3 and is eligible for second reading in the Senate next week.

ANNEXATION

  • HB 1362 was amended in committee this week to provide a new option for balloting for municipally initiated annexations but still requires an affirmative vote of 51% of property owners to go forward. It also voids existing remonstrance waivers and modifies the timelines of the process.
  • Aim opposes HB 1362 because it would make the already cumbersome process of municipally initiated annexation even more difficult. We will continue to work with bill authors and committee members in both chambers to work on annexation reform that fixes real problems in the statute without creating unnecessary barriers to development.
  • HB 1472 and HB 1473, authored by Rep. Greg Steuerwald (R-Avon), passed out of the House Local Government Committee unanimously last Tuesday.

TAX INCREMENT FINANCING

  • HB 1561, as introduced, would have created real challenges for TIF districts requiring mandatory passthrough of AV over certain arbitrary limits, creating cumbersome new processes for spending TIF funds, and calling certain development agreements into question.
  • HB 1561 was amended significantly, including with suggestions from Aim, to improve these harmful parts of the bill and include some additional flexibility for some TIF districts.
  • HB 1561, authored by Rep. Ed Clere (R-New Albany), passed the House Ways and Means Committee on Thursday with a vote of 17-6.

ROAD FUNDING

  • HB 1461 would create three tiers for the Community Crossings Matching Grant Program (CCMG), one with a smaller match for smaller communities, one with a larger cap for larger communities, and one with a general formula funding for all communities. The bill would also require all cities and towns to pass a local wheel tax by 2028 to be eligible for CCMG-. The bill allows additional flexibility for the MVH restricted fund and allows more options for tolling at the state level.
  • HB 1461 is a work in progress and Aim has worked with the bill author to improve this language for our members. As this bill moves through the process Aim will continue to advocate for flexible revenue sources to fund local roads and streets.
  • HB 1461, authored by Rep. Jim Pressel (R-Rolling Prairie), passed the House Ways and Means Committee on Thursday with a vote of 14-9.

AIM INITIATIVES

  • HB 1312 (Rep. Jennifer Meltzer, R-Shelbyville) would allow local units to post required public notices to a state-run, searchable website instead of requiring them to publish these notices with a locally circulated newspaper, creating efficiencies and cost savings for local governments.
  • HB 1477 (Rep. Alex Zimmerman, R-North Vernon) would clarify some zoning language for mobile and manufactured homes and provide for new processes to hold mobile home park owners accountable for not paying utility bills before shutting water off to the entire mobile home park.
  • HB 1587 (Rep. Martin Carbaugh, R-Fort Wayne) would allow mobile integrated health programs to bill private insurance for primary care services provided through the program, increasing the financial viability of these programs and reducing costs for local governments.
  • All these bills will be eligible for a final vote in the House of Representatives next week.
 

MARKET STREET TO MAIN STREET LEGISLATIVE PODCAST

Listen to more about this week on the sixth episode of the 2025 Market Street to Main Street Podcast Series, Aim’s legislative episodes of the Hometown Innovations Podcast and a supplement to this e-newsletter. In this episode, Jennifer discusses the past week of committees with Amy Krieg, Isabel Elliott, and Campbell Ricci, including property tax reform, annexation, and the state fruit proposal.

To listen to Market Street to Main Street, please visit The Terminal post and click the “play button” on the audio player. Or you can subscribe to Aim Hometown Innovations Podcast on Podbean, Apple Podcasts, and Spotify.

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