SPEEDWAY — Local leaders across Central Indiana met Wednesday to discuss Indiana’s new property tax law.
Many town and city leaders shared that SEA 1 could have serious long-term effects on how cities and towns fund essential services such as public safety and infrastructure.
WATCH FULL STORY BELOW
The bill gives Indiana homeowners a 10% property tax credit, but city and town officials say it will also reduce the revenue communities rely on to provide daily services. Accelerate Indiana Municipalities, or AIM, which represents nearly 500 cities and towns across the state, brought local officials together in Speedway this week to discuss the potential impact and explore solutions.
“The main concerns should be when you wake up and look out your window, are your streets plowed if it snows? Are your sidewalks in good repair?” said Matt Greller, CEO of AIM. “We’re not asking to undo property tax cuts...We just want to make the income tax side of things more workable, since that’s what local governments will rely on most going forward.”
AIM’s top recommendations to lawmakers include giving cities and towns a larger share of local income tax revenue, simplifying the adoption process so rates are only revisited when changes are needed, and giving smaller communities more control over their funding instead of relying solely on county councils.
In Speedway, Town Manager Grant Kleinhenz said the community is financially stable for now and won’t have to make cuts in 2026 thanks to careful budgeting and reallocating funds. However, he said the town could lose nearly $1 million a year starting in 2027 and 2028, roughly 21% of its budget.
“It’s not an immediate impact, but this is a long and far-reaching one,” Kleinhenz said. “It gets harder and harder annually when revenues are reduced because of changes at the state level.”
Kleinhenz said about 85% of Speedway’s general fund comes from property tax revenue. Without changes to how local income taxes are distributed, he said that the town will need to find new revenue sources to maintain essential services.
In Brownsburg, Town Council President Travis Tschaenn shared similar concerns, saying the town could struggle to keep up with infrastructure needs and maintain pay raises for first responders.
“People like our police officers and firefighters who are expecting a pay raise every year may not be able to see that anymore,” Tschaenn said.
Greller described ongoing talks with lawmakers as “cautiously optimistic,” saying many legislators are still learning the details of the bill but are open to making improvements. He said AIM’s goal is to ensure local governments have stable, sustainable funding to maintain services that residents depend on daily.
“When you think about what local government does, keeping roads drivable, parks open and neighborhoods safe, it’s what affects people most directly,” Greller said. “Those amenities can’t go away.”
AIM is continuing a statewide tour to meet with officials in West Lafayette, Terre Haute, Evansville and Jeffersonville to raise awareness about the funding challenges and gather feedback.
“Local government is the most impactful level of government,” Kleinhenz said. “It affects how we live every day, but when funding sources are continually cut without replacements that work, it’s tough for us to do our job.”
