DeLaney informs homeowners of issues that have led to increased property tax bills, proposes solutions

As property tax bills hit mailboxes starting this week, with Marion County valuations up an average of 18.9% from last year, it is clear that Indiana’s property tax system is in need of reform. Rep. Ed DeLaney (D-Indianapolis) wants homeowners to understand the nature of the problem and be apprised of potential solutions. 

“Some homeowners have experienced a dramatic increase in assessed value, and thus their bill may be historically high this year,” DeLaney said. “Put simply, our 1% property tax cap and overall property tax system is showing its age. It is unable to weather upswings in valuation as we’ve seen this year or, I suspect, downswings. This is not sustainable for our homeowners, public schools or local government.”

DeLaney pointed to a set of problems with the system, including:

1. 2007 property tax reform and resulting system is not responsive enough to keep up with a changing market, as shown by the post-pandemic housing market volatility
2. The system has left schools in need of seeking referenda to make up for gaps in funding for operations, capital projects and debt paydown
3. Indiana’s number and variety of different local government units, which are ultimately competing for the same property tax dollar 

“The problems with the system become apparent when you look at how the supermajority has had to jury-rig it,” DeLaney added. “For example, Republican legislators added a new ‘operations fund’ to our school funding formula this year using income tax revenue to help areas of the state with lower property values and thus lower property tax revenue for schools. A functioning tax system would not require that, nor would it force schools to resort to referenda to seek funding.”

“Make no mistake, Statehouse Republicans knew this was coming from a mile away,” DeLaney said. “The writing was on the wall as soon as pandemic homebuying trends started increasing property values. But Republicans chose not to build in guardrails for this unusual period in valuation – or take meaningful steps toward creating a more sustainable system – and now some hard-working Hoosiers are on the hook for a massive increase in their property taxes.

“However, Republicans aren’t even allowing our traditional K-12 public schools to benefit from this revenue. As pointed out by my Democratic colleagues, this year’s biennial budget will result in an effective funding cut for most public schools due to inflation and House Republicans’ plan to put schools on the hook for textbook costs. And Senate Bill 391 will force public schools to hand over referenda to charter schools, which do not have local accountability measures in place. 

“This is all to say that this property tax season, you’re getting pummeled on property taxes to support public schools, while Republican legislators are taking funding and assets away from them at every possible turn. I intend to work during this upcoming interim to take some strain off the system by funding schools less through property tax revenue and more through the state. I hope Republicans will join me in pursuing a study on the topic and legislation next year. It may be too late to offer a meaningful fix this year, but we can help homeowners in the years to come. 

“Finally, I want to thank Mayor Joe Hogsett and local Indianapolis officials for allocating funds for a $100-150 credit for homeowners so they don’t have to bear the entire brunt of this increase in bills. Marion County residents should be aware that they have until June 15 to appeal their property assessment, unlike most other counties that mailed assessments out last year.”