State Rep. Joanna King (R-Middlebury) (seventh from left) listens to Elkhart County officials during a meeting to discuss Senate Enrolled Act 1 on Thursday, Aug. 14, at the Elkhart County Administration Building in Goshen. King and other lawmakers were there to discuss property tax relief and reform. Others pictured are, from left, State Rep. Craig Snow (R-Warsaw), State Rep. Jeff Thompson (R-Lizton), House Fiscal Analyst, Wakarusa Town Manager Rob Slagle, Wakarusa Town Council President Rocco Rigsby, State Sen. Linda Rogers (R-Granger) and State Rep. Doug Miller (R-Elkhart). Photo by Dani Messick | The Goshen News
GOSHEN — Elkhart County legislators are concerned about Senate Enrolled Act 1. Following an invite from State Rep. Joanna King, (R-Middlebury), many county leaders recently met with her and other state officials to discuss the bill and its impacts on local funding, but they say they don’t yet have the answers they need, and they’re headed into budget season.
Elkhart County leaders, including mayors of Elkhart (Rob Roberson), Goshen (Gina Leichty) and Nappanee (Phil Jenkins), council leaders from across the county, including Phil Miller of Middlebury, Arvis Dawson of Elkhart, Brett Weddell of Goshen, Rocco Rigsby of Wakarusa, Jeff Beachey of Bristol, Elkhart County Council members and many others brought their questions to the meeting, where some say they were not answered.
Elkhart County Commissioner Brad Rogers said that while they appreciated the sit-down, which also included Rep. Jeffrey Thompson, R-Lizton, who authored the bill on the House side, ultimately sponsored the bill and is chairman of Indiana House Ways & Means, they really didn’t get many questions answered and instead were able to use the time to present the legislators, including Sen. Blake Doriot (R-Goshen), Rep. Craig Snow R-Warsaw) and Sen. Linda Rogers, (R-Osceola) with proposals and considerations for modifications to the bill as they make changes in the future.
“We’re going into a budget session and we’re not sure as a county,” Rogers said. “We’re really confused. … We’re just perplexed as to how this funding works and who gets what and how it’s divided between cities and counties, the Local Income Tax (LIT), how that’s going to work and who gets penalized and, this could pit counties against cities and vice versa and we never wanted that.”
Senate Enrolled Act 1, or SB1, was passed back in April as a reform of property taxes statewide. The bill and its supporters also claim that homeowners will see a $300 decrease over the next few years in their property taxes and decreases in income tax in exchange for counties and cities receiving less money from them. However, local jurisdictions are concerned that their funding may be cut too much. Elkhart reported in early August an anticipated decrease in $34 million in income tax when that’s eliminated and property tax revenue down $6 million, per the bill, when it’s all fully implemented in 2028. It’s a third of Elkhart’s budget. Goshen is much the same, with an anticipated $13.2 million loss annually by 2028.
During the Elkhart County Council meeting on Thursday, councilman Steven Clark explained that the bill changes the property taxes from a levy-based to a rate-based system.
“In theory, that’s actually not a bad idea, however, this bill does not do that,” Clark said, adding that Thompson at the meeting admitted the bill doesn’t do that, and said the state legislature needs to make changes to it.
“The problem is, if they want to fix it in the next session, we have budgets due in a couple weeks, how do we plan?” he said. “Local governments are kind of flying blind. Do we invest? Do we cut roads? Do we do bridges? What do we have to do? And so while our state took a bad system and made it worse, locals are now forced to try to understand this and work around bad legislation.”
Clark said the levy system is still in place, and he doesn’t believe the bill will help decrease property taxes for homeowners.
Clark stated that the bill gets rid of the $48,000 Homestead deduction and the Supplemental deduction for a home below $600,000 at 35%, shifting them to a two-thirds deduction. Clark said flat rates help lower value homes more.
The levy, however, is a different story.
“The levy goes up each year by however much the state says it will,” he said. “After COVID, they’ve just been setting it every year.”
Over 90% of the county’s budget is for roads, he noted.
The rates, he said, don’t matter, what you’re paying matters.
“The levy sets the rate, not the other way around, and that’s important to know,” he said.
For example, a $550,000 home in Olive Township with Homestead and Supplemental exemptions as it stands today, would give a an assessed value of $313,000. With a tax rate of 1.5%, the bill would be about $4,753. The new SB1 would imply a 48% tax cut after the math, Clark claimed, but he said, it doesn’t take into account the levy.
“Because the tax rate doesn’t matter,” he said. “So what’s going to happen is the levy’s going to continue to go up by whatever the state says and then to offset that — because remember, the levy determines the tax rate — so all of the sudden the tax rate is going to jump from 1.5% to 2.8% just to stay even. … It’s just a game on how they play these numbers.”
Instead, tax cuts for business personal property no longer have a 30% floor, and the exemption was moved from $80,000 to $2 million, so businesses may see tax decreases.
“I don’t think your taxes will go down,” he said.
He also said, while he thinks counties may be able to offset their decrease, cities will be “decimated.”
In addition, income taxes for people who do not live in Elkhart County but work here, will go away in 2028.
Clark told people to mark their calendars to check their bills each year to see if their tax bill will go down under SB1.
“Unless they do something different in the upcoming session, I’m calling shenanigans,” he said. “What this bill does is every year, we’re going to get up here as a council and vote for the tax rate. What I bet you’re going to hear from state legislators is they’re going to say ‘We cut your rates. They jacked up that rate.’ We’ll have to get up here every year and vote on this thing that doesn’t make a difference … so that they can tell you that you got a tax cut and we’re the ones that jacked it up and that’s not true.”
Elkhart County Council president Tom Stump said there are parts of Clark’s commentary that he agrees with, but until they know how the levy system will translate, he doesn’t agree yet.
Elkhart County Councilman Doug Graham asked during the council meeting about the county justice income tax of 25% Property Tax Replacement Credit and County Assessor Patty Pickens said she doesn’t know. Commissioner Suzie Weirick said one of the reasons the state is OK with saying they can deal with it later is that the true impacts do not come into place on the budgets until 2027.
“The first two years, ‘25 pay ‘26 and ‘26 pay ‘27 are property tax changes, which will directly impact the levy — us property tax payers, residents, will not see changes,” she said. “Starting in ‘26 pay ‘27 is when the BPPT (Business Personal Property Tax) will come into play and that will directly impact the levy but again will not impact us residents except change our tax bill — it’ll give relief to businesses. So then the goal is to make up for it with Local Income Tax, which again, in our county, we bring in 80,000 workers a day that use our roads, use fire, use our emergency management, use our police, use all our services, and they will not pay any taxes any longer, starting in ‘28 to use our services. … This is a phased-in, so they can take time to understand it.”
Graham said he questioned Thompson during the meeting the week prior.
“The general public hears the headline that they got a 10% tax deduction up to $300 per home, and I questioned him and he agreed that ... it did not represent what actually happened in that tax bill,” Graham said. “And unfortunately, a lot of people are walking around thinking that their tax bill is going to come down by 10% with a maximum of $300, and I guess the point Steven’s been making is that that really doesn’t reflect what’s going to happen. People care what they write a check for, not what budget it sits in.”
Weirick said county leaders should take control and tell legislators what changes they want to see in the bill.
“This has been an ongoing conversation that municipal leaders, at the county level, at townships, at libraries, at schools, are having with our local legislators,” said Goshen Mayor Gina Leichty. “As we’ve been talking with the state legislators and they’ve been becoming more aware of the impact on cities — because it’s taking a long time for a lot of the cities and municipalities and units of government to get their impact statements from Baker Tilly or whoever their financial adviser is. … One of the things that struck me at the meeting last week, Chairman Thompson asked for a date by when local municipalities would have ‘concrete information’ about revenue recovery from impact tax potential. … That system doesn’t exist today. There is no structure to provide that information, so we have to just make estimates based on the number of households and you can make some rough guess estimates, but nobody knows parcel-by-parcel what each individual household income tax is.”
Leichty said Thompson told them they’d have that information available by July 2026, but if municipalities are looking at a cliff in two years, they have to start making strategic decisions now. “What we were hoping for at that meeting was that there would be some explanation as to corrective steps that either Chairman Thompson or some other legislators might be willing to explore so that we would kind of know ‘What’s the plan here?’” Leichty said. “It didn’t seem like there was a corrective plan yet in action.”
Leichty said Thompson instead did tell them that he intends to have corrective action on the table for the next legislative session in January but he wasn’t confident that there would be substantive change in the bill in less than two years.
“We’re looking at freezing just routine maintenance for a couple years,” she said. “How much do we freeze right now, just to make sure that we don’t ultimately fall off this cliff if we’re not getting clear direction from the state legislators on how they’re going to make corrective action?”
Leichty said she knows the state doesn’t usually address the budget two years in a row, but she urged legislators to take action regardless.
“It’s not a partisan issue,” she said. “It’s not that as a local government, that we’re adverse to change, that we don’t see that there were some things that needed to be fixed with the old system. Totally agree, need to change, willing to work through it. The problem is that we weren’t consulted in the process of that legislation being developed and it’s not a helpful piece of legislation for anybody and we want to make sure that it gets fixed, and to get it fixed, we’ve got to work together.”
Leichty said she felt frustrated because she “did not hear a sense of urgency at the meeting” from legislators, and added that large manufacturing communities like Elkhart County would be more strongly impacted.
“We cannot let our road infrastructure crumble for a couple years while we take our time playing with math,” she said.
To make matters worse, and more intimidating for certain municipalities, Elkhart County Councilman Adam Bujalski claimed that while the bill allows the cities of Nappanee, Goshen and Elkhart to determine their own Local Income Tax (LIT) tax. Smaller jurisdictions, those 3,500 and below would be at the mercy of their county council, who could easily give them no LIT funding.
“We haven’t elected people in these positions, we have elected bodies that the citizens of those communities have asked to handle their finances, much like the county residents have asked us, and these boards, these town councils and all these things, are having all of their local fiscal control ripped out of their hands and being given to the counties,” Bujalski said. “I have some friends down in the southern part of the state that do not know anyone on their county council. They’ve reached out, and now they have these county councils that are going to be setting the fiscal standards for their towns and now they have zero relationship. … To me I really feel like there’s an attack on our small towns.”
Clark also called for a special meeting with the council and other groups to discuss plans with the public. The council chose to hold off on the meeting until they know more.
Representatives expressed frustration that the presentation they expected to see was only about “five minutes long,” while the meeting, full of questions and ideas, lasted around an hour and a half.
Still, area leaders said they felt positive about the fact that they all expressed a united front.
“I learned that it’s a big bill and a lot of people that voted on it didn’t know what they were voting on,” said Elkhart County Council president Arvis Dawson. “All the county and state officials were pretty adamant that this bill didn’t do us justice for what we’re trying to do with our communities.”
Rep. King issued a press release regarding the meeting, where it was said that she felt the meeting went well and was informative.
“I wanted leaders in our community to come together to have a positive and insightful meeting about the impacts of Senate Enrolled 1 and what is means for residents,” King said. “This was a productive meeting and we discussed how the law will provide immediate, meaningful relief to homeowners and move us to a more accountable system that keeps our communities thriving without burdening taxpayers.”
King said the new law provides increased credits and deductions for all homeowners, as well as additional relief for fixed-income seniors. The press release also indicates that King believes the tax reform offers short-term significant relief and creates a system that improves accountability in local government spending. According to the press release, the bill decreases total local income taxes local governments can collect by $1.9 billion.
Local leaders are interested in continued conversations.
“I think we’ll have more of these meetings and I think we’ll work more collaboratively as a county with our state legislators,” Dawson said. “There are consequences sometimes that they may not think about that affects cities and towns and I think we resonated that with the county and city officials.”
© 2025 Community Newspaper Holdings, Inc.