Indiana Senate Bill SB0353

Indiana 2025 Regular Session

• Introduced: 1/14/25
• Refer: 1/14/25

Caption

Property tax rate freeze.

Summary

SB 353 would create a temporary property tax rate freeze mechanism for Indiana civil taxing units for taxes first due and payable in 2026 and 2027. The bill directs the Department of Local Government Finance to calculate each taxing unit’s maximum permissible ad valorem property tax levy and resulting tax rate using a comparison to the unit’s 2025 levy-to-assessed-value ratio. If a unit’s levy-to-assessed-value percentage would increase in 2026 or 2027 compared with 2025, the bill limits the levy so that it does not exceed the 2025 percentage applied to the later year’s net assessed value, subject to the bill’s formula. The bill applies broadly to civil taxing units, including school corporations’ operations funds, and would amend Indiana Code section 6-1.1-18.5-31 by adding a new section governing levy calculations. In practical terms, it would constrain how much local property tax levies can grow relative to assessed value over the two-year period, potentially reducing or delaying revenue growth for local governments and school operations funds if assessed values change in ways that would otherwise allow higher rates. The general sentiment reflected by the bill’s caption and structure is that it is intended as a taxpayer relief or tax-stabilization measure, with no recorded committee debate or votes available in the provided materials. Because there are no transcripts or vote tallies, there is no direct evidence of support or opposition in the record supplied here, but the bill’s design suggests an emphasis on limiting property tax increases rather than expanding local taxing authority. The main point of contention likely centers on the tradeoff between property tax predictability for taxpayers and revenue flexibility for local governments, counties, municipalities, and school corporations. Supporters would likely favor the freeze as a way to restrain tax growth, while opponents may argue it could constrain budgets, especially if assessed values shift or local service costs rise. The bill’s use of a formula tied to 2025 ratios also raises technical concerns about implementation and how the Department of Local Government Finance would apply the cap across different taxing units.

Impact

SB 353 would amend Indiana’s property tax levy calculation rules by adding a new section to IC 6-1.1-18.5-31. It would require the Department of Local Government Finance to cap 2026 and 2027 maximum permissible ad valorem property tax levies based on each civil taxing unit’s 2025 levy-to-net-assessed-value ratio, thereby limiting rate and levy increases for local governments and school corporation operations funds. The bill would affect local taxing units statewide by constraining future levy calculations and potentially reducing allowable property tax revenue growth.

Sentiment

The bill appears to have a generally pro-taxpayer, tax-stabilization orientation, as reflected in its caption as a “property tax rate freeze.” No committee transcripts or votes were provided, so there is no documented public debate in the record supplied here. Based on the text alone, the measure seems designed to restrain local property tax growth rather than expand it, which typically draws support from taxpayers and opposition or caution from local government finance interests.

Contention

The likely contention is between property tax relief and local fiscal capacity. Taxpayers and advocates for lower or more predictable property taxes would likely support the freeze, while civil taxing units, including counties, municipalities, and school corporations, may object because the cap could limit revenue growth even when costs increase. Another likely issue is the technical complexity of the formula and whether tying 2026 and 2027 limits to 2025 ratios could create uneven effects across taxing units depending on changes in assessed value.