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The newest Indiana House Republicans plan for property tax reform promises to save homeowners $1.1 billion in property taxes — but it’s not yet clear who will benefit or how this iteration will affect schools.
Additionally, lawmakers said Friday that a plan to require Indiana school districts to share some property tax funding with charter schools in Senate Bill 518 would be added to the larger property tax bill, Senate Bill 1.
Republican House Speaker Todd Huston and Republican Ways and Means Chair Jeff Thompson unveiled Friday their version of SB 1, which will be heard and voted on Monday morning in the ways and means committee. It includes changes to property tax deductions and credits, as well as other changes aimed at reform, they said.
Under their plan, Huston and Thompson said, more than half of all Hoosiers would pay less property tax in 2026 than 2025. But they did not provide details of which homeowners would benefit or how homeowners could determine if they would pay less.
It’s also not immediately clear what effect this version of SB 1 would have on Indiana school districts, which rely on property taxes to supplement state funding. The first version of property tax reform from Gov. Mike Braun would have cost schools and other local government entities around $1.2 billion in 2026 and up to $1.6 billion in 2028. The plan passed by Senate lawmakers in February — and panned by Braun — would have reduced this hit to around $300 million in 2026 and $800 million in 2028.
This effect would likely be multiplied if districts were required to share the tax revenue they receive for operations, debt service, and capital projects with charter schools, as well as referendums, as outlined by SB 518. Huston said Friday that the House version of SB 518 would remove the sharing of debt and capital fund levies, but that otherwise the idea fit well with House Republicans’ priorities.
Lawmakers said more information would be available after the House Ways and Means Committee Monday.
As in previous versions, the House amendment to SB 1 would require that property tax referendums be held only during general elections. It would also create a Property Tax Transparency Portal to allow taxpayers to compare their bill to proposed rate changes.
Huston placed the onus of ballooning property tax bills on local governments raising revenue to cover debt. Reforms will allow homeowners to understand their bill, rather than solve an “algebraic equation,” he said.
“I think it’ll be more transparent to the residents and their communities about what their taxes are, and if they’re going to raise them, what the cost will be,” Huston said.
In a statement, Rep. Greg Porter, the ranking Democrat on the ways and means committee, said the newest draft of the plan was “far from a solution.”
“Our schools will lose money, especially with Senate Bill 518 rolled into the plan diverting property tax dollars to charter schools so the state can pay even less,” the statement said. “This plan encourages local governments to raise their local income tax rate, so you’ll get more money in your right pocket but have to pay more out of your left.”
Bills must pass out of committee by April 10. The legislative session must conclude by April 29.
Aleksandra Appleton covers Indiana education policy and writes about K-12 schools across the state. Contact her at aappleton@chalkbeat.org.
