Braun’s plan would cost Indiana school districts about $1.9 billion across three years, according to an estimate from the nonpartisan Legislative Services Agency.
(Rachel Fradette / WFYI)
After years ofsurging tax billsfor Hoosier homeowners, Gov. Mike Braun is pushing to cut property taxes and set caps on annual increases.
But local school districts would feel the sting of his proposed limits because they rely on that money to fund transportation, debt service and capital projects.
Property taxes are the largest source of revenue for local governments.
Braun’s plan– currently defined inSenate Bill 1– would reduce property taxes through a cap on tax increases at 3% and increase the state’s homestead exemption. Taxes would be capped at 2% for seniors, low-income families and families with non-adult children.
Caps on property taxes, which are nationally used to stabilize bills for homeowners amid soaring home values, force school districts to find new funds or cut back budgets.
Braun has frequently expressed his desire for governments to do “more with less” to provide relief to taxpayers. He echoed that at a Tuesday press briefing when he said school districts need to run more efficiently.
“Almost all of them are saying that they can't do without what they're having now, I would say, prove it,” Braun said. “Prove it that you didn’t salt away a lot, that you didn’t overburden the taxpayer by maybe making investments in buildings that weren’t needed or other things that weren’t essential.”
Braun’s proposal is likely to face significant debate before it is finalized. The legislative session must conclude by the end of April.
Three Central Indiana school districts would lose the most under the Republican tax plan.
Hamilton Southeastern Schools would lose the most out of any school district in the state – more than $82 million across three years.
In a statement to WFYI, HSE’s district spokeswoman Emily Pace-Abbotts said the district understands that these legislative changes are complex and will take time to finalize.
“During this time, we remain hopeful that a resolution can be reached that avoids any negative impact on school budgets,” Pace-Abbotts said. “Our priority is to collaborate with legislators to emphasize the critical role of public education funding in supporting student success and fostering strong communities.”
The proposed reductions in revenue would be “devastating” for Carmel Clay Schools, said Emily Bauer, the district’s spokeswoman. Carmel would see revenue losses of nearly $77 million from 2026 to 2028, according to LSA.
“Completely eliminating existing funding would lead to job losses and severe reductions in student services,” Bauer wrote. “A more responsible approach would be to consider limiting future tax increases rather than making immediate, drastic cuts that would destabilize our schools and community.”
Indianapolis Public Schools – the state’s largest school district – would lose about $70 million under the current tax plan within those three years, according to LSA.
Here’s how much money all of the state’s school districts are projected to lose under Braun’s plan.
Rachel Fradette is the WFYI Statehouse education reporter. Contact Rachel atrfradette@wfyi.org.
