JANUARY 24, 2025

The Big Issues

PROPERTY TAX REFORM

  • Several property tax bills will be heard in the Senate Tax and Fiscal Policy Committee next Tuesday for consideration. All of these bills are starting points to what will be a wide-ranging discussion about property tax reform during the 2025 legislative session.
  • SB 9, authored by Sen. Scott Baldwin (R-Noblesville), rewrites the MLGQ formula, the rate at which general fund property tax levies can grow from year to year, to be differentiated by county and be based on a combination of four economic metrics instead of simply nonfarm personal income growth. The result of this bill is a lower overall MLGQ relative to the historical formula and a lower MLGQ for all but 10 counties relative to the current 4% cap.
  • SB 443, authored by Sen. Aaron Freeman (R-Indianapolis), proposes eliminating the depreciation floor for the business personal property tax and increasing the exemption from $80,000 to $160,000. The result of these changes projects a loss of over $380M to local units once fully phased in.
  • Aim is advocating for municipal revenue sources and a strong, guaranteed replacement revenue mechanism to any and all proposed property tax cuts as we move throughout session.

ROAD FUNDING

  • HB 1461 changes a number of state and local road funding concepts in Indiana. It proposes that Community Crossings is tiered into three different levels, one for smaller communities with a match of 20%, one for larger communities with match level unchanged but with a cap three times higher than that of the lowest tier, and any amount above $150M in the fund would go to the MVH formula. It also requires local units to have a wheel tax to be eligible for community crossings funding.
  • The bill also adds a county option delivery fee on goods delivered by large companies. This bill includes language to require INDOT to get more waivers from the federal government to potentially toll interstates. These two proposals represent a potential for new revenue both at the state and local level in the road funding formula.
  • Aim is working with the bill author to make the Community Crossings changes workable for municipalities. We are also monitoring the discussion of potential new revenue sources to ensure they benefit local communities.
  • HB 1461, authored by Rep. Jim Pressel (R-Rolling Prairie), will be heard in the House Roads and Transportation Committee next Monday.

MUNICIPAL ELECTIONS

  • SB 355 proposes moving all municipal elections to the presidential election cycle. The bill allows municipalities to opt out of this change if the council approves the opt-out and it succeeds at referendum.
  • Aim opposes SB 355 as the current municipal election cycle ensures that local issues stay front-and-center when mayors, clerks, and council members are up for election. Moving the elections to the national cycles would drown out local issues in the minds of voters and force municipal officials to spend most of their time talking about national partisan issues instead of the issues that they would have jurisdiction over and matter most to their communities.
  • SB 355, authored by Sen. Mike Gaskill (R-Pendleton), will be heard next Monday in the Senate Elections Committee.

TAX INCREMENT FINANCING

  • HB 1561 would make several changes to TIF areas including requiring passthrough or immediate expenditure of funds that go over a debt reserve cap, add an onerous new process for expenditures outside of TIF allocation areas, and cause confusion about the ability of local units to do site-specific TIFs inside of larger TIF areas.
  • Aim opposes the current version of HB 1561 as it reduces the flexibility of TIF and adds confusion and delays to the process. Aim’s legislative team continues to work with the author and committee members to alleviate these concerns.
  • HB 1561, authored by Rep. Ed Clere (R-New Albany), was heard in the House Ways and Means Committee on Wednesday but was held for future amendments and a vote at a later meeting.

HOUSING DEVELOPMENT

  • HB 1005 adds $25M to the Residential Infrastructure Fund (RIF) and gives preference to communities with zoning and design standards conducive to development in prioritizing the funds. It also adds language requiring local units to accept inspections and plan reviews from third-party service providers.
  • Aim has concerns about the requirements on local units around third-party service providers and is actively working with the bill author to ensure that local units maintain control over their permitting and inspection processes. Aim supports the expansion of the RIF and continues to work to encourage housing development.
  • HB 1005, authored by Rep. Doug Miller (R-Elkhart), will be heard in the House Government and Regulatory Reform Committee next Monday.

MARKET STREET TO MAIN STREET LEGISLATIVE PODCAST

Listen to more about this week on the third 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 is joined by Amy Krieg and Isabel Elliott to discuss what’s on the docket for next week at the Statehouse.

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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