McCormick releases proposal to regulate property taxes • Indiana Capital Chronicle

Indiana's Democratic gubernatorial candidate on Thursday unveiled her plan to address rising property taxes, including the financial impact and expected savings for taxpayers.

Jennifer McCormick's campaign released a fact sheet Thursday morning touting the plan as a way to “provide targeted assistance to those who need it most without cutting police, fire and school services that are critical to Indiana citizens.”

“Many Indiana residents are struggling to keep up with rising property taxes caused by increased assessed values. Retirees, those on fixed incomes, veterans and working families deserve relief,” McCormick said in the release. “Our common-sense plan helps those feeling the pain of property taxes without plundering critical funds that support our local communities, schools, libraries, police and fire departments.”

Similar proposals from her Republican and Libertarian opponents have been criticized for not including budget estimates or identifying alternative funding sources for key local services such as public safety. McCormick relied largely on proposals from lawmakers that were previously vetted by the General Assembly's Legislative Services Agencies, which calculate the budget impact for every bill introduced by lawmakers.

McCormick's plan calls for a cap on property tax increases at 10%, combined with a 40% increase in the property tax deduction for homeowners, a 150% increase in personal exemptions, and a 33% increase in the renter's tax deduction.

Accordingly an analysis According to a study by the Association of Indiana Counties and Policy Analytics, gross home values ​​increased an average of 16.5% between 2022 and 2023 and property tax bills increased an average of 18.2%.

Plan details

A 10% increase in the cap could save homeowners about $23 million in calendar year 2024 and $7 million the following year, according to the Tax calculations for a 2022 bill introduced by Republican Senator Brian Buchanan of Lebanon. However, schools, libraries, counties and cities would lose this funding.

A 40% property tax increase from $2,500 to $3,500 would save an estimated $8.8 million. to LSAwhich will cost the state between $358 million and $4,360 million in fiscal year 2025.

For seniors, individuals with incomes up to $40,000 and households with incomes up to $50,000 and assessed value up to $300,000 would be eligible – an increase from the current statutory limit of $30,000 and $40,000 for property up to $200,000. Estimated costs of the LSA The cost of this would be between $15 million and $22 million and would impact local government units.

For disabled veterans – including Indiana residents with total disabilities or veterans over 62 with at least 10% disability – the cap on assessed values ​​would be increased from $240,000 to $350,000. Local governments would estimated $6.8 million which these taxpayers would save.

Increasing the personal income exemption by 150% would raise the limit from $1,000 to $2,500. Taxpayers would estimated $500 million The state would lose about $333 million and local governments would lose $173 million.

Finally, increasing the rent exemption from $3,000 to $4,000 could cost an estimated $28 million in state and local revenue annually.

Comparison with opponents

US Senator Mike Braun, McCormick’s Republican opponent, released his Proposal for property tax without any fiscal analysis and some aspects adjusted after promising a reset to 2021 levels – something that was not included in the original plan.

Braun's plan points to the state's homeowner's deduction, which is designed to lower the taxable value of a home but “has not kept pace with rising home values,” the campaign says.

Homeowners with an assessed value of over $125,000 could deduct 60% of their home's assessed value, while those whose home is under that amount could take the standard deduction of $48,000 plus an additional 60% deduction.

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In addition, future tax increases for seniors, low-income Indiana residents and families with children under 18 would be capped at two percent annually. For all other homeowners, the tax rate would be capped at three percent annually.

The Braun team said the average Indiana homeowner would have saved $1,000 over the past five years with the tax cap. Braun's plan also included changes to the wording of the referendum ballot, among other things.

Meanwhile, property taxes Libertarian Donald Rainwater's plan would limit taxes based on the purchase price.

McCormick criticized Braun for his plan, which only affected local coffers, as opposed to the state budget – and referred to his Voting 2015 in the General Assembly for a failed bill that would have included several Changes in tax law.

“Mike Braun's plan is frivolous, reckless and fiscally irresponsible. Leave it to a Washington, D.C. politician like Mike Braun to promise tax cuts that won't come out of the state budget or hurt state spending,” McCormick said in a press release. “The state can provide property tax relief now to those who need it while finding a long-term solution to address local funding needs. It's simply a matter of budget priorities. As a state representative, Mike Braun voted for higher property taxes when he had the chance to put Indiana residents first. I will always put Indiana residents first and support our local communities.”

This story will be updated.