Johnson County finance chief warns Senate Bill 1 will shrink property tax revenue; appeals and LIT changes shape 2026 budget

Mike Reuter, Johnson County’s fiscal director, told the County Council that a set of state changes and a pending “growth appeal” will be the key variables shaping the county’s 2026 budget and long-term fiscal strategy. Reuter said the county’s assessed valuation rose sharply this year, but that the net tax effect for many taxpayers depends on a combination of the new Supplemental Homestead Credit in Senate Bill 1 and whether the county’s appeal for additional levy capacity is approved by the Indiana Department of Local Government Finance (DLGF).

Reuter said the DLGF has certified the county’s maximum levy calculation at a 4% increase for most units and explained that the only routine way to go beyond that limit is an approved growth appeal. “You mathematically would qualify for a million $9.14,” Reuter said of this year’s appeal amount, but he cautioned the council that the DLGF is taking a stricter, more subjective review of appeals this year and that approvals will likely be harder to obtain than in the past. He told the council to plan cautiously and prepare budget scenarios both with and without the appeal.

Why it matters: Senate Bill 1 and the DLGF’s guidance change how property and homestead relief are applied, reducing some revenues that counties historically relied on. Reuter said Johnson County’s assessed valuation increased about 12.3% this year, which on its face is strong, “but the legislative changes change the calculus.” The council must decide whether to adopt a higher budget now — which helps an appeal by showing obligations and encumbrances — or budget more conservatively in case the appeal is disallowed.

What Reuter presented: Reuter said he updated the county fiscal plan to reflect six months of actual collections and the latest revenue…