The Amended Property Tax Bill Could Lead to Higher Income Taxes

While the amended Senate Bill 1 would cut property taxes for Hoosiers, it could lead to an increase in income tax.

USA and Indiana Flag atop the State Capitol building in Indianapolis, Indiana at Sunset — Source: Jeremy Poland / Getty

Senate Bill 1, an amended property tax bill that doesn’t align with Gov. Braun’s original property tax reform plan, cleared the Indiana House of Representatives on Thursday in a 65-29 vote.

Supporters of the bill claim that it would give two-thirds of Hoosier homeowners a lower bill in 2026 compared to 2025.

“Under this bill, nearly all Hoosiers are going to see property tax relief,” said State Rep. Jeff Thompson (R-Lizton), chair of the House Ways and Means Committee. “This legislation is a massive win for Hoosier homeowners and taxpayers, in the near term and in the future.”

Senate Bill 1 would save homeowners a collective $1.2 billion in property taxes over three calendar years, from 2026 through 2028, according to a Thursday fiscal analysis. It does so largely by creating a credit for 10% off every homestead’s bill, up to $300 each.

However, local units of government would lose a projected $1.5 billion over the three years since they get a large sum of their money from property taxes, per the analysis. Public school corporations alone represent about half the loss, at $744 million — although Democrats contend other tax changes push that figure to almost $800 million.

Since local governments would be losing a significant amount money, this could ultimately lead to an increase in income tax to make up for the losses.

Assistant Democratic Caucus Chair Ed Delaney criticized what he called “Braun math”, referencing Indiana Governor Mike Braun who supports the amended Senate Bill 1.

“Braun math says if I save you a nickel in your left pocket, I can take 15 nickels out of your right pocket. I mean we’ve slashed the overall capacity for local income taxes, but we’ve driven up the usage,” said Delaney on Thursday who voted against the bill.

Rob Kendall further explained how this bill would negatively impact Hoosier taxpayers. You can listen to the full segment here:

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