Mishawaka board warned property-tax law could drive operations revenue to zero by 2028

April Fitterling of Policy Analytics told the School City of Mishawaka Board of School Trustees on Dec. 3 that changes in Senate Enrolled Act 1 could sharply reduce property-tax revenue for the district’s operations fund, potentially creating “negative revenue” by 2028 if no statutory protections are enacted.

Fitterling said the law phases out the standard homestead deduction while phasing in a supplemental deduction, creates a new homestead credit (10% or $300 maximum), and raises the business personal property de minimis threshold (from $80,000 to $2,000,000). She said those mechanics reduce net assessed value and increase unfunded credits under the state’s circuit-breaker system, which lowers the district’s collectible levy.

Why it matters: the presentation modeled parcel-level data for the district and showed that the combination of new credits and the scheduled removal of a local income tax property-relief credit in 2028 could push circuit-breaker losses past levy amounts and “essentially create a negative revenue into the operations fund for the district,” in Fitterling’s words. She also said roughly $39,000,000 of net assessed value in the district could be removed from the calculation in 2027 because of business personal property changes.

The presentation traced projected impacts across funds separately (debt service, operations and referendum). Fitterling emphasized that debt service is currently more protected than operations but that new credits and loss of local income-tax relief concentrate pressure on operations, an account that covers utilities, transportation and staff costs. “In 2028, when that property tax relief credit goes away… the overall circuit breaker loss surpasses the levy and essentially creates a negative revenue into the operations fund for the district,” she said.

Board reaction and next steps: Superintendent Dr. Stevens told the board Baker Tilly had recommended the district contract with Policy Analytics for a parcel-level forecast; the board had previously approved that contract. Fitterling urged district leaders to monitor legislative action that could protect debt service or otherwise change how credits are applied. Board members thanked the presenter and discussed that the forecast is intended to inform planning rather than to be a fixed prediction.

What the presentation did not provide: exact dollar-by-dollar offset plans or enacted legislative remedies; Fitterling’s slides showed scenario modeling and assumptions. The district will use the forecasted scenarios to inform budgeting and contingency planning and watch pending legislation closely.

The board did not vote on any immediate policy or budget action at the meeting; the presentation was delivered as information to help planning and potential advocacy.