LOUISVILLE, Ky. (WDRB) — Indiana Gov. Mike Braun said he expects more discussion about property taxes, even after lawmakers approved $1.2 billion in tax cuts earlier this year.
Property taxes bring in about $11 billion a year in Indiana. That money helps pay for schools, police and fire departments and local road projects.
Earlier this year, lawmakers passed Senate Bill 1. The law cuts property taxes for many homeowners but also reduces revenue for local governments and school districts.
Braun said those communities will have to do more with less.
"And part of that is local governments, school districts, maybe have to run things more efficiently," Braun said. "They were growing a lot faster than the underlying economy."
Braun said Senate Bill 1 is expected to exempt about two-thirds of Indiana homeowners from paying property taxes over the next five years.
His comments come as an Indiana state representative continues working on a proposal that would eliminate Indiana's property tax system altogether.
J.D. Prescott Prescott wants to replace that revenue with a 7% sales tax on many services that aren't currently taxed, including landscaping, construction labor and haircuts. He has said the proposal would continue funding local governments while lowering the tax burden on homeowners.
Braun didn't take a position on the proposal, but said the conversation is likely to continue.
"I think that'll be the interesting conversation," Braun said. "We're already lightening the load on homeowners. The other categories — commercial, industrial, agriculture, multifamily housing here in Indiana — they'd probably like that load lightened as well."
Braun also said Indiana's roughly $1.8 billion budget surplus could help the state invest in areas like childcare and early childhood education.
"Those are things that we could probably do a little better at compared to other states," Braun said.
Any additional property tax changes, and how the budget surplus is spent, if at all, would have to be approved by the Indiana General Assembly.
Copyright 2026 WDRB Media. All Rights Reserved.
