JEFFERSONVILLE — The Jeffersonville Redevelopment Commission heard information recently that indicates possible revenue loss due to recent state legislation.
Baker Tilly manager Sam Schrader presented his annual report and analysis of the city’s tax-increment financing districts.
He explained the mechanics of the TIF districts, which captures new assessed value and property taxes from new development in the designated area. It is then reinvested back into the area. Several infrastructure projects and other improvements in Jeffersonville have been footed through TIF funds.
Senate Bill 1 is a recently passed property tax relief bill. The bill has garnered criticism from Southern Indiana municipalities since it would affect their property tax revenue.
Schrader said the bill has made drastic changes to property tax reductions and credits, especially for 1% properties, which are standard homesteads, and 2% properties, which are vacant agricultural land, rental homes, apartment homes, mobile homes and longterm care facilities.
Starting in 2026, these properties will receive a phased-in tax deduction until 2031.
He said that the city’s two largest TIF districts are the InnerCity Roads Economic Development Area and the Falls Landing/Harbours Economic Development Area.He said that 1% and 2% properties make up over half of the assessed value in these areas.
“There are gonna be impacts from these legislative changes to Jeffersonville’s TIF collection in the future,” Schrader said.
Jeffersonville Mayor Mike Moore said he has sent this information compiled by Baker Tilly to local legislators.
“It’s been very enlightening for the last two months to see how little the state legislature knewaboutwhattheywerevoting on,” he said.
Schrader said that the InnerCity Roads area will see a decrease of up to $55 million by 2031, despite the fact that a large part of it is expiring in 2026.
He said this area is performing “extremely well,” and collected $17.5 million in 2024 with an estimated $20 million to be collected in 2025. The total expenditures for projects is around $74 million. The Falls Landing area also said it’s performing well at $3.2 million captured in 2024 Schrader said that the bonds that have been taken out to use for TIF area are not jeopardized, and that the city still has the capacity to make those payments. However, he said that “pay-as-you-go” projects may be affected. He also said there is language in the bill for a neutralization process in these cases of debt service payments.
“I’m very frightened,” Moore said.
Schrader also reported to the commission on the local income tax adjustments. The current system is that counties collect these taxes and then distribute them based on levies.
Now, municipalities can adopt an up to 1.2% local income tax rate.While Schrader said they don’t have the best data on this, they determined that there could be a shortfall as a result of this.
Schrader said that it is a misconception that TIF districts take funds away from other units, since they provide revenue for development where it otherwise might have never happened.
He said TIF districts attract new development, grow property tax value and reduce property tax cap losses.
He said he hopes that the legislature will come back in the spring to fix the legislation.
“We found that for most cities and towns, it’s unfavorable,” he said. He also said that counties could be in a better situation, however.
“We’re all in deep trouble if they don’t come back and fix this,” Moore said.
© 2025 Community Newspaper Holdings, Inc.