Senate Bill 1 will reshape Monroe County revenue picture, county financial adviser warns

Chair Jennifer Crossley called the Long Term Finance Planning Committee to order April 24 and invited a presentation on Senate Bill 1. Greg Garrattas, president of Financial Solutions Group, told the committee that the legislation would significantly change property-tax treatment, personal-property valuation, and local income taxes.

Garrattas said the bill phases in changes to the homestead deduction between 2026 and 2031 and converts some homeowner relief to a credit. "Every number you see or every comment you hear today is as of 04/24 11AM," he said, and cautioned that the Department of Local Government Finance (DLGF) and other legislative actions were still active. He explained the credit would operate as a dollar reduction on the tax bill (for example, the "$300 or 10% whichever is less" provision), while deductions reduce assessed value.

Why it matters: Garrattas said reduced assessed valuations (he estimated residential assessed values could fall roughly 6' to 8% per year under the bill) will push tax rates higher to raise the same levy, increasing the number of parcels subject to the circuit breaker. That shift, he said, makes revenue growth from new assessed value and from the local income tax (LIT) more important to sustain county services.

Key details Garrattas highlighted included: - Homestead relief will be phased in across 2026'31 and may convert some deductions to credits; taxpayers will likely have to apply for credits rather than receive them automatically. - Personal property minimum floors largely disappear for property placed in service after the current year; federal depreciation rules and multiple Form 103 variants will govern reporting. - Garrattas estimated personal property currently represents about 7.2% of Monroe County's total assessed value — a nontrivial share — though much of that may decline under the legislation. - A 4% growth quotient is in the bill; Garrattas described that as a modest allowance that will not fully offset downward pressure on assessed value in many places.

On local income tax, Garrattas said the county service rate cap will be 1.2% and that municipalities with populations over 3,500 retain authority to set their own 1.2% rate. He described the new LIT structure as reducing the role of the existing income-tax council and said the Indiana Department of Revenue's geofencing work (how taxable income is allocated across jurisdictions) will be consequential in coming years. "Financial breathing room is the difference between that cap and basically where you're at," he told the committee.

Garrattas warned that many provisions remain subject to change through trailer bills, DLGF actions and administrative interpretation, and he recommended the county plan on a longer-term (five-year) horizon for budgets and sustainability work rather than shorter windows.

Ending: Committee members asked follow-up questions about TIFs, apartment personal property, and whether municipal and county income-tax decisions will require collaboration; Garrattas said collaboration "makes sense where appropriate" but that the statute does not itself require counties and cities to coordinate.