March 3, 2023
The Big Issues
- HB 1499 is the House version of a plan for property tax relief and currently provides additional property tax limits in most aspects of the property tax system for the next two years starting in 2024 including: lowering the 1% homestead property tax cap to 0.95%, capping levy growth at 3% per year, increasing the supplemental homestead deduction, and causing any project that pushed debt service levies over 0.4% into the controlled projects statute that triggers referendum to approve the project. It also allows counties to voluntarily provide property tax credits or rebates in 2023.
- The Senate passed SB 46 that allows counties to impose a maximum property tax levy growth limitation of 2-5% on all or part of the county to help taxpayers in areas experiencing rapid AV growth.
- As property tax bills come out in the second half of session and each of these property tax relief concepts move through their second legislative house, legislative conversations on how to provide property tax relief will only increase in importance. Aim will continue to oppose sweeping or long-lasting changes to the property tax system and advocate that any property tax relief that does pass is targeted to taxpayers who are experiencing large property tax increases.
- HB 1016 would automatically establish merit systems for all police and fire departments that have at least 12 full-time members in cities or towns with at least 10,000 in population. Both the council and a majority of the officers or firefighters would have to vote to opt out of this new requirement.
- Aim opposes this bill because it fundamentally changes the local process by automatically opting communities into a merit system. Many communities have merit boards that work effectively, and others have chosen not to manage their departments using this tool. The decision should remain with local elected leaders.
- HB 1016, authored by Rep. Jim Pressel (R-Rolling Prairie) and sponsored by Sen. Jack Sandlin (R-Indianapolis), will be heard in the Senate Pensions and Labor Committee on Wednesday.
TAX INCREMENT FINANCING
- HB 1085 would have changed the makeup of RDCs to erode the authority of the executive, require mandatory release of AV, and impose new requirements on spending to require council approval to spend money outside the allocation areas. This bill would have significantly restricted the flexibility of TIF and the ability to effectively finance economic development projects.
- Aim opposed HB 1085 and appreciates the countless number of members who reached out to their legislators to discuss the harmful consequences this bill would have on local economic development efforts. This message resonated with many members of the House who committed to opposing this bill as well.
- Due to the hard work of Aim members, HB 1085, authored by Rep. Bob Cherry (R-Greenfield), was not called down for a vote on the House floor before the deadline and is now a dead bill.
- The House has passed their version of the state’s biennial budget. It includes many helpful provisions, including $500M for a second round of READI, $75M for the revolving housing loan fund outlined in HB 1005, and $225M in new funding for grants to local health departments to improve the funding of core public health services.
- There is concerning language in the budget that exempts school operations levies from property tax cap losses and language that requires READI funding used for broadband projects to conform to the existing broadband grant code, a more restrictive grant program that could place in jeopardy some planned broadband improvements using READI funds.
- Aim will continue to monitor HB 1001, authored by Rep. Jeff Thompson (R-Lizton) and sponsored by Sen. Ryan Mishler (R-Mishawaka), and help fiscal leadership understand the impacts of the concerning language and support the helpful funding initiatives.
UPDATES ON AIM INITIATIVES
- SB 300, authored by Sen. Linda Rogers (R-Granger), removes the limitation of which communities can use residential TIF and removes the requirement for school boards to approve the use of residential TIF. The bill has passed the Senate and is being sponsored in the House by Rep. Doug Miller (R-Elkhart).
- SB 317, authored by Sen Andy Zay (R-Huntington), which allows local governments to make advanced payments or deposits to secure purchases up to 50% of the cost of the project, has passed the Senate and is being sponsored in the House by Rep. Chris May (R-Bedford).
- SB 20 and HB 1349 grant local governments the ability to designate outdoor refreshment areas in which alcohol can be carried out and consumed for festivals, concerts, and other great local events. SB 20 is authored by Sen. Liz Brown (R-Fort Wayne) is being sponsored in the House by Rep. Matt Lehman (R-Berne) while HB 1349, authored by Rep. Shane Lindauer (R-Jasper), is being sponsored in the Senate by Sen. Mark Messmer (R-Jasper).
AIM LEGISLATIVE MOMENT
“Jenna and the team did an outstanding job of pushing back on some legislation, particularly related to TIF. I’m slightly surprised that we got it done in the first half, which has not typically been the case. It’s a really good outcome. It allows us now to focus a lot of attention on the property tax discussion, the public health commission findings, and initiatives that are in various bills in the second half.”
– Matt Greller, Aim CEO
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