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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?
Finding the right balance between fair and equitable taxes and essential government services for Hoosiers has been a complex challenge for decades for the fiscal leaders of our state. Indiana has long prided itself on maintaining low property taxes. But at what cost?
From the Bowen reforms of the 1970s to the Daniels-era tax caps and now the sweeping changes under Gov. Braun’s Senate Enrolled Act 1, our state has repeatedly restructured its property tax system. While these efforts have succeeded in lowering taxes—Indiana now ranks 39th nationally in property tax as a percentage of personal income—there’s a resulting consequence of the erosion of essential public services.
School corporations alone are projected to lose over $770 million in property tax revenue over the next three years as a result of SEA 1. That’s on top of the “circuit breaker” losses of $4.1 billion since 2009 due to the imposition of tax caps.
School corporations are already stretched thin. Most of their operations funds go to insurance, utilities and transportation, leaving little for facility upkeep or new construction. SEA 1, when fully implemented, will prompt school corporations to spend down reserves, cut staff, delay building projects and rely on aging buses. One corporation forecasts a swing from a modest operations fund cash reserve of $279,534 in 2024 to a staggering $3.5 million deficit
by 2028.
With fewer dollars in the operations fund, schools will be forced to transfer more from their education fund—money meant for classrooms and teachers. That means smaller pay raises, larger class sizes and a less experienced teaching workforce. The growing instability of levy dollars will also hurt the credit or bond ratings of school corporations, driving up the costs of borrowing. Many districts will turn to referendums—asking voters to approve new taxes just to maintain core services.
These outcomes prompted by SEA 1 will not only impact the quality of teaching and learning in the classroom but will jeopardize Indiana’s future. We must ask ourselves: Are we willing to sacrifice the quality of our schools, roads and emergency services for the sake of ranking 50th in property tax burden?
Our public schools educate 1 million Hoosier children—the future workforce that will drive our economy, attract employers and strengthen our communities. Undermining their education undermines Indiana’s prosperity.
It’s time to think beyond SEA 1. Let’s invest in the services that define our quality of life. Let’s protect our schools to provide for a world-class education our children deserve. Let’s stand up for our communities.
Because in the end, you get what you pay for.•
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Spradlin is executive director of the Indiana School Boards Association, which provides resources and expertise for boards to support K-12 student learning. Send comments to [email protected].
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