Consultant: Senate Enrolled Act 1 will mute Jennings County school revenues, push tax rates higher

Barry Gardner, a consultant with Policy Analytics, told the Jennings County School Corporation work session that Senate Enrolled Act 1 will shrink the district’s taxable base and mute revenue growth while pushing tax rates higher.

Gardner said the law, signed into force as “Senate Enrolled Act 1,” changes homeowner deductions, introduces a 10% homestead credit (up to $300) beginning in 2026, raises certain deductions for seniors and veterans, increases the business personal property reporting exemption to $2,000,000 in 2027, and alters farmland base-rate calculations — all of which reduce net assessed value (AV) available to fund local governments and schools.

Why it matters: the district’s net assessed value is projected to decline through 2030 under Gardner’s model, producing a statewide pattern of higher tax rates to generate roughly the same levy. For Jennings County Schools, Gardner said those mechanics could create a roughly $2 million gap in revenue beginning in 2028 compared with pre‑Act projections; under scenarios in which the district attempts to keep its current tax rate, cumulative revenue foregone could reach $2 million–$4 million by 2031.

Gardner summarized three pillars of impact: tax-rate effects, levy/revenue effects for school operations and debt service, and taxpayer-facing changes in individual property tax bills. He explained that the law moves from a $48,000 flat homeowner deduction toward larger percentage deductions phased in over six years (eventually roughly two-thirds), and also adds a homestead credit worth 10% of tax liability up to $300. "The rates don't reflect the revenue situations that we've seen," Gardner said, describing how declining net AV forces rates upward even when revenue is flat.

On business personal property (BPP), Gardner said the reporting exemption threshold rises from the recent $80,000 floor to $2,000,000 beginning in 2027, and new equipment may be depreciated to zero for taxable purposes. "That pulls assessed value out of the system," he said, and could reduce the share of AV attributable to BPP over time. He also noted the law changes the farmland base-rate calculation (Gardner cautioned his per-acre figures might be slightly off).

Gardner flagged a related provision affecting debt service: the legislature previously set a debt-service cap that triggered mandatory capital referenda above 80¢; that cap is now lowered in some cases to 70¢, and a separate 40¢ threshold treats projects as "controlled projects" that require additional hearings and allow taxpayer petitions. He said these thresholds mean some districts may face extra procedural steps if tax rates move upward.

Local income tax (LIT) and property tax replacement credits figure into Gardner’s modeling. He said current certified-share distributions to the district total about $630,000 and that existing LIT-based property tax relief (PTRC) is scheduled under current law to end in 2027–2028. If that LIT/PTRC revenue is not replaced, Gardner’s slides project a larger drop in district revenue in 2028.

Gardner presented illustrative taxpayer examples from two taxing districts: in one where homeowners already pay the property-tax cap, the new homestead credit produces a modest immediate reduction in billed liability; in another where households are not at the cap, removal of business property from the tax base and loss of PTRC pushes homeowner bills up by amounts Gardner’s model estimated roughly at $140–$300 in certain years.

Board members acknowledged the difficulty of the changes and said district leadership has been modeling scenarios. The presiding board member noted the district is "looking at it now" and praised staff work to be proactive. Gardner and district staff said further refinement will depend on upcoming certified AV releases and ongoing work with the district’s financial advisors.

No formal action or vote occurred; the presentation was informational and the board directed staff to continue financial modeling and to share updates as new AV and legislative decisions arrive.

The presentation and slides are the primary local record of the district-specific projections discussed at the session. Gardner recommended monitoring changes to state-level implementation, possible legislative fixes (including protections for debt service), and local AV releases to refine the district’s cash-flow and levy planning.