State property-tax overhaul will shrink Elkhart school tax base, consultants tell board

Policy Analytics, an Indianapolis firm working with more than 80 Indiana districts, told the Elkhart Community Schools board on July 22 that the state's Senate Enrolled Act 1 will shrink the district's property-tax base, push local tax rates higher and reduce annual revenues by millions of dollars.

The firm's lead presenter, Barry Gardner, said the law phases in larger deductions for homeowners, raises the homestead credit beginning in 2026 and effectively removes much small-scale business personal property from taxable rolls. "It's going to increase the deduction for homeowners," Gardner told the board, and the combined changes will lower net assessed value for the district through 2031.

That matters because the district's revenue is the product of net assessed value times local tax rates. Gardner said the projected decline in net assessed value could force tax rates up by roughly 30 to 50 cents over the next six years even while measured revenues for many districts remain flat or decline. He showed a scenario in which Elkhart's operations fund revenue is about $5 million lower annually in 2031 than it would have been under the prior system.

Gardner walked the board through the law's major mechanics: the phase-out of the standard homeowner deduction over six years, an increase of the supplemental deduction from 35% to about 66%, a new homestead liability…