Gov. Mike Braun’s property tax plan has now become an act after the Indiana Senate passed it in a 37-10 vote Monday.
The House of Representatives will vote on it at a later date.
Senate Bill 1 addresses rising property taxes with a system Braun campaigned on, according to Post-Tribune archives. The bill changes the homestead standard deduction amount of 60% of the homestead’s assessed value if the value is more than $125,000 or $48,000 plus 60% of the remaining assessed value if the homestead has an assessed value of $125,000 or less.
The bill was amended by the Senate Tax and Fiscal Policy Committee to include portions of Senate Bills 6, 8 and 9. The amended bill lessens some of the cuts to school districts, libraries and local government.
The fiscal impact of the amended bill would cut $1.4 billion across the state between 2026 and 2025, including $370.9 million from schools, $67 million from libraries, $304.3 million from cities and towns, and $346.6 million from counties, while the original report from the Legislative Services Agency detailed $4.1 billion in cuts between 2026 and 2028, including $1.9 billion from schools, $254 million from libraries, $890 million from cities and towns, and $765 million from counties.
Sen. Rick Niemeyer, R-Lowell, voted for the bill and explained his vote beforehand. Niemeyer said his constituents were worried about relief for senior citizens and veterans.
Senate Bill 1 “addressed that right off the bat” and gives relief to those groups, Niemeyer said. Sen. Linda Rogers, R-Granger, presented an amendment that allows a veteran with either a total disability or 62 years of age with a partial disability to see an increase in deduction from $14,000 to $20,000 with a change in the assessed value limit from $240,000 to $300,000.
For those 65 years or older, the income limit for deduction and credit shifts to $60,000 from $30,000 for a single filer and to $70,000 from $40,000 for a joint filer, according to Post-Tribune archives. It also changes the assessed value limit from $240,000 to $300,000.
Niemeyer also supports the bill because it helps first-time homebuyers, he said Monday. Sen. Tyler Johson, R-Leo, shared an amendment in committee that would create a property tax credit for most first-time home buyers, according to Post-Tribune archives. The credit would be $2,500 annually for five years, for a total tax credit of $12,500.
“They can get some credit and help for four or five years when they’re struggling to make payments, struggling to raise a family,” Niemeyer said. “This gives them something, and that’s again tied to income deadlines. … This is good, thoughtful legislation to move something out of here. Now that we can say that this is going to give the relief that we want, I think you can get support on this back home.”
Sen. Dan Dernulc, R-Highland, and Sen. Ed Charbonneau, R-Valparaiso, were the two other Northwest Indiana senators who approved Senate Bill 1.
Before the vote Monday, Dernulc acknowledged the House will probably change aspects of the bill, but the Senate has to keep it moving forward.
Dernulc said he likes to see relief for local government and schools, but his constituents want more tax relief, too.
“This is a good start,” Dernulc said. “I’m going to vote yes, but I will be watching for some great changes in this and also from the House.”
Sen. Rodney Pol, D-Chesterton; Sen. Lonnie Randolph, D-East Chicago; and Sen. Mark Spencer, D-Gary, were among the votes against the bill.
Sen. Andrea Hunley, D-Indianapolis, said she voted against Senate Bill 1 because it left out relief for rents. About 600,000 Hoosiers are renters, Hunley said Monday.
“Many of my constituents live in rental units, and I want to make sure that my constituents also receive benefits through tax relief,” she said. “Today, I’m going to be a no, but I’m hoping that we will get this bill to a place where I’ll be able to support it.”
mwilkins@chicagotribune.com
