Sen. Travis Holdman: Reform is a balancing act that needs time to play out

Featured Issue:
In the 2026 legislative session, should lawmakers make any changes to the property tax law they passed this year that cut property taxes and has reduced revenue for cities, towns and counties?

In 2024, by far the top issue public officials were hearing about was Hoosier homeowners’ desire for relief on their property tax bills.

State lawmakers responded to the will of our constituents by passing Senate Enrolled Act 1, the most significant property tax relief package since Indiana’s property tax caps almost 20 years ago. SEA 1 provides a new property tax credit for every homestead, increases the homestead deduction and includes extra relief for the neediest homeowners like seniors and disabled Hoosiers. All told, the bill is projected to save homeowners $1.3 billion over the next three years alone.

Crafting SEA 1 was no easy task, because property tax decisions necessarily involve two separate sets of policymakers—state and local. The state, which receives $0 from property taxes, sets overall property tax limits and makes the legal framework for the system. All revenue from property taxes is collected by and distributed to local government units like counties, cities and schools. Local officials are ultimately in charge of making their own financial decisions, including setting levies and determining assessed values, both of which determine what homeowners pay in property taxes.

Lawmakers understood that our bill had to walk a tightrope to provide meaningful relief for homeowners while honoring the budget needs of local governments, since they provide the services that matter most to residents in their daily lives—schools, police, fire protection, road maintenance, etc. To do so, we worked with everyone from our fellow legislators to executive branch colleagues to local officials.

SEA 1 strikes an appropriate balance. Based on the state’s nonpartisan revenue projections, two-thirds of homeowners are expected to have a lower property tax bill in 2026 than 2025. For local governments overall, based on year-over-year property tax projections, total statewide property tax revenue is projected to grow 1.5% in 2026, 5.1% in 2027 and 1.9% in 2028.

With SEA 1 now signed into law, it’s time to let the dust settle. Taxpayers won’t see the benefits of the law until property tax bills go out next spring. Local government officials spent the fall adopting their annual budgets based on projections showing how SEA 1 will affect their bottom line.

While we wait to see the results of SEA 1 in action, my fellow lawmakers and I are having conversations with local government leaders to make sure the law will work as intended. Technical fixes and some procedural adjustments, particularly for local income tax, might be on the horizon in 2026, but an overhaul of SEA 1 should not be expected.

Some local officials are expressing dismay over the new law, but others are working with the Legislature to identify real issues and collaborate on solutions, and for that I want to say, “Thank you.”

Homeowners told us loud and clear they want lower property taxes, but they also want safe communities and good schools. We can accomplish both goals if state and local leaders keep working together.•

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Holdman, R-Markle, represents Senate District 19, which includes Adams, Blackford, Jay and Wells counties and a portion of Allen County. Send comments to [email protected].

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