Fishers staff: Senate Bill 1, $300 property-credit and tax-code changes will reshape 2026 budget and local revenue tools

City of Fishers staff presented an overview of statewide tax changes and the city’s preliminary 2026 budget, saying the new state property-tax credit and related reforms will reduce local assessed values and shift parts of revenue collection toward local option income tax.

At a work session presentation, staff described the key legislative change as a state credit applied after property tax bills are computed: a credit of up to 10% or a $300 maximum that takes effect in 2026. Staff said that credit creates an immediate revenue loss local governments must absorb, and that the enacted package also raised or expanded several deductions and exemptions that will reduce assessed valuations over time.

Why it matters: City staff said the combined changes can lower assessed values (which can push tax rates up) while also reducing how much revenue flows through the existing property-tax system. To compensate, Fishers will have the explicit ability to set a local option income tax (LIT) rate for the city for 2028; staff urged beginning deliberations on a local rate well before the 2027 deadlines.

Key points presented - New state property-credit: The credit is described as “up to 10% or $300 maximum,” applied after a taxpayer’s bill is computed. Staff said that a $300,000 house that hit the 1% circuit-breaker cap ($3,000 liability)…