Hoosier homeowners plagued by out-of-control property taxes
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With the first installment of property taxes due May 10, residential taxpayers are feeling the tremendous impact of the recent spike in housing values. Regardless of whether or not they have a mortgage or pay their taxes through a lender, property tax assessments have skyrocketed.
Indiana appraisers use the “market value” approach relying on three methods during assessment: cost, sales comparison and income. This assessment approach is closely tied with changes in the housing market. Home values in Indiana’s housing market have increased by 42% since 2020 and have subsequently driven up property taxes for homeowners. On average, Hoosier’s property taxes have increased by a massive 17% on average in the past year. However, the Indiana GOP passed on the chance to reform our tax system which burdens Hoosier homeowners – especially those on limited or fixed incomes.
In contrast to the GOP’s inaction, House Democrats attempted to offset both the ongoing and forecasted increases. During the 2023 budget session, House Democrats proposed a $200 Homestead Credit for all residential homeowners. This $200 credit would have brought down the actual tax bill of every Hoosier homeowner. In addition to the credit, House Dems attempted to increase the Homestead Deduction from $48,000 to $56,000. A deduction would have directly addressed the spike in assessments by lowering the value of a home when it comes to its taxed valuation. Both of these measures would have taken a substantial bite out of homeowner’s property tax bills. Unfortunately, the Republican majority passed on the opportunity to lower property taxes for Hoosiers.
Once again in 2024, House Democrats tried to provide some real relief to the escalation in property taxes. We proposed a $250 Homestead Credit be applied directly to homeowners’ property tax bills. Despite the property tax crisis getting worse, the Indiana GOP refused to consider our proposal or any form of tangible property tax relief.
Instead, the majority party passed a very limited proposal that provides almost no “real relief” to Hoosier homeowners. It fails to solve the core issue of our assessment approach and severely reduces the amount of tax revenue that can be used by local governments and schools. To make matters worse, this proposal dilutes the optional school referendum process which the GOP offered as a solution to our severely underfunded public school system. Their solution is punitive and does not utilize state dollars whatsoever resulting in cuts for local units. The GOP put a small, dirty band aid over a gushing wound.
House Democrats have consistently advocated for property tax relief that would take the “sting” out of increased valuations and the spike in homeowner’s bills. The Indiana GOP has continued to drag their feet on property tax reform. When they finally acted, they provided temporary and insignificant relief by enacting a proposal that starves local institutions of revenue. It’s in the best interest of the Indiana GOP to work alongside Democrats to create a sustainable relief plan. Next session we must lower property tax bills while ensuring relief is not at the detriment to our local governments, schools, roads and more.
