Staff Report

WARSAW — Kosciusko County could face a significant financial shortfall if Governor Mike Braun’s proposed property tax reform is enacted as currently written. The plan is projected to reduce local government revenue by $12 million in the first year, with losses increasing to $15 million and $17 million in the following years.

Sue Ann Mitchell

Kosciusko County Commissioner Sue Ann Mitchell, who also serves as president of the Association of Indiana Counties, recently testified in Indianapolis to address the potential impact of Senate Bill 1. The proposed legislation would cap annual property tax increases at 2-3% while increasing the homestead standard deduction.

Historically, significant tax policy changes have been preceded by a study committee involving local taxation experts. However, this proposal was developed before Braun took office, and no such committee was convened. Concerns have been raised that the financial implications may not have been fully considered during the drafting process.

During a visit to Indianapolis, Mitchell participated in discussions with state officials, including a meeting with Governor Braun. While concerns about the proposal’s impact were presented, responses from state leadership remained broad in scope.

Analysis of the bill indicates that school corporations, municipalities, and counties would be most affected. Despite the substantial revenue reductions, the legislation does not include a mechanism to replace the lost funds.

In addition to revenue reductions, the proposed legislation would shift referendums to county election years to ensure broader voter participation. Currently, some referendums take place during municipal elections, which has limited voter engagement in certain cases.

Another potential consequence of the bill is a reduction in funding for Health First Indiana, an initiative that has significantly increased health funding for counties over the past two years. If cuts occur, local health services could face financial challenges.

With the legislative session concluding on April 29, local officials will need to assess the final outcome of the proposal and determine how to adjust budgets accordingly.