Consultant warns Senate Bill 1 will shrink Greater Clark's assessed value and push tax rates higher

Jane Herndon of Policy Analytics told the Greater Clark County Schools Board of Trustees on Aug. 12 that Indiana's Senate Enrolled Act 1 (commonly referred to as Senate Bill 1) will materially change the district's tax base and revenue over the next decade.

"We are seeing over the next five years, assessed value decrease," Herndon said during a presentation the board scheduled ahead of the district's August budget work. Herndon walked trustees through several provisions she said will lower net assessed value: an expanded supplemental homestead credit (the lesser of 10% of a homeowner's tax liability or $300) phased in through 2031; new deductions for property taxed at a 2% cap (for example, apartments and certain long-term care facilities); and a larger business personal property exemption (raised, per the presentation, from $80,000 to $2,000,000), effective beginning in 2027 for the district.

Herndon projected that Greater Clark's net assessed value would fall about 17% between 2025 and 2031 once the bill's deductions and exemptions fully phase in. That reduction, she said, means tax rates will increase to collect the same levy. "Due to Senate Bill 1, the tax rate is projected to increase by 36 cents to $1.46," Herndon said, placing the district near the statewide average change she and her team modeled.

She also showed a scenario focused on the debt-service rate: if the district asks for the same debt levy in future years, the debt rate would increase by roughly 14 cents to about 83 cents per $100 of assessed value. Herndon emphasized the work ahead in two scenarios her team modeled: (1) a flat-levy scenario in which the district requests the same dollars each year and accepts a higher rate, and (2) a "rate" scenario where the district asks for more dollars to try to hold rate changes down.

Herndon highlighted additional items that will affect collections: the presentation cited the imminent reduction or elimination of the Property Tax Replacement Credit (PTRC) in 2028 and changes to how local income tax (LIT) shares are certified. The district currently receives certified LIT shares and an estimated $1.1 million in cash under the existing arrangements; Herndon said that the PTRC and some LIT arrangements will change in 2028, which will reduce the district's net revenue in the near term.

On projected dollar impacts, Herndon's slides and discussion showed the district could collect about $12.25 million in property taxes for operations in 2025 (before changes), dropping to roughly $8 million when the PTRC and other reductions take effect in 2028, then rising slowly thereafter but remaining below the 2025 collection level in Herndon's model. She said that, compared with a hypothetical no-policy-change baseline, the district could receive roughly $7.3 million less over the modeled period.

Board members raised procedural and intergovernmental questions during the presentation. One trustee asked whether county leadership could share income-tax revenue to offset school losses; Herndon advised the board to consult county leaders and legal counsel because the bill's language leaves some of those arrangements unclear. "I encourage you to talk a little bit with your counsel about that," she said.

Superintendent and cabinet speakers told the board the presentation was intended to prepare trustees for the Aug. 26 budget hearing and to give the public context about why advertised levies and rate scenarios may change. The superintendent emphasized the potential impact on operations, listing transportation, utilities, insurance and classified staff as areas that could be affected if revenue falls.

Herndon and the district provided detailed appendices with 10-year levy projections, circuit-breaker loss estimates and scenario tables. The district did not adopt any levy changes at the Aug. 12 meeting; trustees scheduled further budget work for later in August.

Notes on presentation numbers: Herndon presented three separate modeled outcomes tied to different levy strategies and to phase-in dates in the legislation. Those slide figures represent Herndon's modeling assumptions and were presented to the board for planning purposes; the district said final certified assessed values and DLGF (Department of Local Government Finance) guidance could change the numbers when official 2026 net assessed values are published.

Proposed options for the board going forward include continuing with a flat levy request, increasing the levy to preserve revenue in real dollars, or pursuing intergovernmental discussions about LIT and PTRC implementation. Trustees said they would use the presentation as background for the Aug. 26 budget hearing and to inform communications to the public about expected bill impacts.