House committee hears broad debate on Senate Bill 1 property-tax reforms, local leaders warn of service cuts

The Indiana House Ways and Means Committee heard hours of testimony and data analysis on Senate Bill 1 on Jan. 28, 2025, as the measure proposing restraints on property-tax growth, referendum changes and new homeowner credits drew praise from tax-relief advocates and blunt warnings from local governments and school districts.

The bill would cap the maximum-levy growth quotient (MLGQ) at 0% for pay 2026, 1% for pay 2027 and 2% for pay 2028, change the timing and wording of some school referenda, create a first-time homebuyer credit and allow several optional local programs such as a small annual property-tax deferral. Proponents said the changes are intended to bring predictability and relief for homeowners after several years of fast assessment-driven increases.

Senator Holman, who presented the Senate package to the committee, said the measures respond to large local borrowing and assessment growth. "As of January the first of 20 25, there's $54,000,000,000 of debt, that is owed by local units of government," Holman said, and outlined provisions to tighten excess-levy appeals and to require some referenda be moved to general elections.

Why it matters: the policy choices set out in Senate Bill 1—levy controls, referendum timing, caps and new credits—would reallocate how much property-tax revenue is available to counties, cities, school districts, libraries and special districts. Supporters say the package trims what would otherwise be steep rises for homeowners; local officials say the package shifts unresolved funding gaps onto local governments and would force cuts to police, fire, public health, roads and schools unless the state or localities identify replacement revenue.

What the committee heard

Data presentation: The Department of Local Government…