INDIANAPOLIS -- It was after midnight before State Senate republicans, despite losing some support on their own side of the aisle, approved and sent to Gov. Mike Braun SB 1, which will provide $1.3 billion in tax relief to Hoosier property owners. The bill also sets the stage for local government s to raise their own local income taxes to make up for the revenue shortfall. Gov. Braun signed the bill into law this afternoon. Senate passes property tax relief bill after marathon session The bill provides tax breaks of up to $300 for property owners, plus relief for farmers and small business owners. ”I’m not sure it's gonna help that many people,” said IU Professor Paul Helmke of the O’Neill School of Public and Environmental Affairs. “Most people that own a home, if they make over $30,000 a year and the local income taxes go up 1%, any savings they get from the property tax is going to be outweighed by an increase in their income taxes.” Marion County residents pay a 1.71% local income tax that could cap out at 2.9% under SB 1. ”I think that all the options need to be left on the table for discussion but I think you know how I feel about raising taxes,” said Indianapolis Mayor Joe Hogsett. “Since Indianapolis and Marion County are already a donor county to the state so that Indianapolis taxpayers don’t get back from the state as much as we pay in to the state, I would be very reluctant to add that to that burden, especially as it comes to local option income.” Hogsett said his staff is still trying to determine the impact of the mandated property tax reduction on Marion County revenues. ”I hold out hope that it won’t be as bad as originally predicted, but until the experts give me a review, I’m being a little pessimistic rather than optimistic,” he said. “It could be a double whammy where the revenue source and revenue stream is narrowed a bit and yet the costs are not. Perhaps the most important single expenditure to the city of Indianapolis is its public safety: police, fire, EMS.” Senate republicans argued that local governments ought to look to the work being done by DOGE in Washington to supposedly ferret out wasteful federal spending when considering how they could cut their own municipal budgets in Indiana. Helmke, the former mayor of Fort Wayne, said local governments already work on thin budget margins. ”I think most local governments have squeezed every little bit of fat that they can find out of their budgets already,” said Helmke. ”The legislature is saying, ‘Look at us, we’ve reduced your property taxes,’ even though the state government gets almost zero from property taxes. This is the other interesting thing. State government pats itself on the back, but they don’t rely on it. They still get the big income tax dollars. They still get the lottery dollars. They don’t cut those sort of things but they cut what the locals can do. The locals have already squeezed what they can out of the budget. Most local budgets are going to employees and most of those employees are public safety employees. Your firefighters. Your police officers. And generally, most folks want more of those people out on the street to keep them safe.” SB 1 backers said the reforms will now force local governments to go before their constituents to ask for tax increases. Renters may not see property tax savings passed on by their landlords, though they may be subjected to higher income taxes. Hundreds of teachers protest SB 1 at the Statehouse during ‘Day of Action’ rally Helmke said local school districts will likely be strapped in raising the revenues to educate the state’s children. ”Public school districts are the definite losers in this,” he said. “They’re gonna lose property tax dollars. They don’t have the option, they don’t get any income tax money, so they’re gonna be stuck. So we’re gonna see our schools in a hard place.” Hogsett said he’s most concerned about continuing to deliver services to Indy residents whose modest tax breaks, if they own property at all, will be offset by a potential deeper income tax bite into their wages. ”Everybody is declaring victory for those who perhaps will enjoy some relief,” he said. “But I would be irresponsible if I didn’t keep at the forefront of my mind who’s going to be adversely impacted.” ...read more read less