FEBRUARY 21, 2025

As we reach the halftime break of the 2025 Legislative Session, our concerns about SB1 remain. While the version passed by the Senate earlier this week is a step in the right direction, there is still more work to be done. We encourage you to take a few minutes to explore the resources available at aimindiana.org/rde and continue with the action items below. We look forward to working with Senate and House leadership, Governor Braun, and his legislative team in the weeks 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 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 that initially contained Governor Braun’s property tax reform package, passed the Senate on Monday with a vote of 37-10.
  • The original expansions of the homestead deduction, resetting tax bills back to 2021 levels, and new property tax growth caps were all removed in committee. 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, phases it 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 an estimated $688M loss to 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. The excess levy appeal is the only tool growing communities possess to keep their tax levy growing with increased service needs and replacing it with rolling referenda is not feasible.
  • SB 1 will likely be heard during the first week of March where the House will have their opportunity to discuss a vision for property tax reform. Aim will work to limit the fiscal impact on local units while providing relief to the taxpayers that need it most.

MUNICIPAL ELECTIONS

  • SB 355 would change the election cycle for all towns to the presidential election year. However, towns with a population of 10,000 or more could opt out of this change by resolution. Cities could move their elections to the presidential election year by resolution.
  • Aim opposes SB 355 because maintaining the municipal election cycle helps keep municipal elections focused on local issues and not muddied by national political conversations and straight-ticket voting at the top of the ticket driving local election results. Further, the bill sets up a patchwork system that would lead to confusion among voters.
  • SB 355, authored by Sen. Mike Gaskill (R-Pendleton), passed the Senate on Thursday with a vote of 29-20.

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.
  • The bill was improved via amendment in committee but some concerns about the language remained from local officials involved in redevelopment. Aim worked with the author of the bill to improve the language.
  • HB 1561, authored by Rep. Ed Clere (R-New Albany), was not called down for third reading prior to the deadline and will not be moving forward during the 2025 Legislative Session.

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 general formula funding for all communities based on lane miles. The bill would also require all cities and towns to pass a local wheel tax by 2028 to be eligible for Community Crossings, with smaller communities only being required to adopt the wheel tax to acquire a larger cap for community crossings funding. 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 has improved a lot with the floor amendments passed this week. Aim will continue to work with legislative leaders to find new local road funding revenue sources to fill important funding gaps going forward.
  • HB 1461, authored by Rep. Jim Pressel (R-Rolling Prairie), passed the House on Thursday with a vote of 72-21.

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 circulating newspaper, creating efficiencies and cost savings for local governments. This bill passed the House with a vote of 57-36.
  • 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. This bill passed the House with a vote of 94-0.
  • 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. This bill passed the House with a vote of 92-0.
 

MARKET STREET TO MAIN STREET LEGISLATIVE PODCAST

Listen to more about this week on the seventh 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, Matt Greller makes a special guest appearance as he joins Jennifer and the Aim legislative team for a halftime report on property tax proposals and a few lesser-known bills we are working on.

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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