Consultant warns new state tax law could cut county property tax revenue by roughly $518,000 next year

A Baker Tilly representative told the Decatur County Board of Commissioners on July 21 that state tax changes will likely slow growth — and in some cases reduce — the county’s net assessed value and could lower property-tax collections beginning in 2026. Queen Statham of Baker Tilly said the firm’s preliminary estimate from the Legislative Services Agency projects a 2026 reduction in county property-tax revenue of about $518,000, and that effect could grow through 2031 as several deductions and credits are phased in. The consultant listed several changes: expanded homestead credits, a higher exemption threshold for business personal property (from $80,000 to $2 million), and the new depreciation rules for large-project personal property referenced in the SEA 1 presentation. Baker Tilly outlined options the county will face under the local-income-tax overhaul that takes effect in later years. The law will replace existing certified LIT shares and allow counties to adopt a county general services LIT up to 1.2%; it also creates separate levies for fire protection/EMS and other nonmunicipal distributions. The consultant provided three example rate scenarios, showing how different LIT choices would generate different revenue totals and how decisions by municipalities (some can adopt rates independently) will interact with county choices. Statham recommended that commissioners and staff take a conservative approach while preparing the 2026 budget. The draft plan recommends planning recurring spending to match estimated receipts — the report shows county general fund receipts estimated at roughly $12.49 million for 2026, down from the 2025 estimated receipts shown in the analysis — and cautioned against adding new recurring payroll or insurance costs that would be difficult to sustain if property tax growth slows. Baker Tilly said more refined modeling is under way and will incorporate additional data to detail county-specific assessed-value impacts and circuit-breaker projections. Commissioners asked procedural questions about the timing of LIT adoption and whether remaining LIT fund balances can be spent; the consultant said many transitional details will be clarified as state guidance and agency rulings arrive.