Some local schools could see crippling job losses and service disruptions as a result of a sweeping GOP tax reform bill that reduces residential property taxes at the expense of Indiana school districts.
School officials are reacting cautiously to the new law aimed at providing tax breaks for homeowners that could lead to deep cuts that impact the classroom.
The proposal was the centerpiece of new Gov. Mike Braun’s legislative agenda as he advised schools “to do more with less.”
With a little more than a week left in the General Assembly’s budget session, the school funding picture is still hazy while school leaders await the fallout from Wednesday’s revenue forecast that projects a $2.4 billion budget shortfall.
They hope they won’t face more cuts.
From 2026 to 2028, Indiana schools could lose an estimated $744.2 million, according to the Indiana Legislative Service Agency. Schools could lose the most — $336 million — in 2028.
Schools rely on property taxes to fund transportation, utilities, maintenance, technology and school safety.
Because of the impact of property tax caps in Lake County that limit tax collections, many districts turn to voters to ask for more money.
This year, Hobart and Crown Point districts are holding special elections May 6 to extend their current referendums that were successful in 2017.
Locally, the growing districts of Crown Point and Lake Central stand to lose the most tax revenue with Crown Point at $13.2 million and Lake Central at $12.3 million.
Gary, which just left state control because of its shaky finances, was projected to lose $12.5 million. In addition, Gary could lose more revenue through a provision in the new law that calls for districts to share property tax revenue with charter schools that draw legal residents in Gary.
Gary has eight charter schools and about 35% of the district’s 11,764 children go to the traditional school district while the rest are dispersed across charter and private schools, as well as neighboring districts with open enrollment.
In Porter County, Duneland schools could lose as much as $8.3 million.
Duneland Superintendent Chip Pettit declined an immediate comment, saying there were a lot of moving parts still in play, including the state revenue forecast anticipating a $2.4 billion shortfall.
Lake Central Superintendent Larry Veracco said the growth quotient in Senate Bill 1’s formula was frozen for 2026 “so that regardless of the upward trend in property values, the taxes generated will be flat,” he said.
His district has about 9,200 students in 10 schools, second only to the School City of Hammond.
“We have a higher assessed value, which is normally a great thing and good when there aren’t parts of the formula frozen. Of course, the impact is worse for districts with more facilities to maintain.”
Growing Hamilton Southeastern and Carmel Clay districts near Indianapolis were hit hard with three-year losses at $26.7 million and $25.2 million, respectively. South Bend Community Schools would lose the most at $27.4 million.
Veracco said Lake Central’s on sound financial footing now, but still can’t control rising energy costs and other expenses.
“We will need to analyze each staff position when a retirement or resignation occurs to see if we can operate with one less person in that area.”
Hobart Superintendent Peggy Buffington said local school officials were still analyzing the impact.
“There is devastating loss no matter which chart we look at. My district is already hit hard by the current property tax caps. We already lost 80% of our levy.”
Carole Carlson is a freelance reporter for the Post-Tribune.
Property tax loss projected from 2026 to 2028*
Lake County
Hanover Community $6.1 million
River Forest $1.6 million
Merrillville $5.3 million
Lake Central $12.3 million
Tri-Creek $3.7 million
Lake Ridge $1.8 million
Crown Point $13.2 million
East Chicago $2.8 million
Lake Station $1.2 million
Gary $12.5 million
Griffith $26 million
Hammond $9 million
Highland $2.8 million
Hobart $4.2 million
Munster $7.3 million
Whiting $665,900
Porter County
Boone Township $1.2 million
Duneland $8.3 million
East Porter $1.9 million
Porter Township $2.7 million
Union Township $2.7 million
Portage $3.3 million
Valparaiso $5.7 million
Source: Indiana Legislative Services Agency
