McCormick releases property tax plan with targeted relief, cap on increases
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Jennifer McCormick, the Democratic candidate running for governor, released what she is calling her “commonsense” property tax plan Thursday afternoon, proposing a 10% cap on property tax bill increases and targeted relief through expanded tax credits for certain Hoosiers.
Her plan follows the release of Republican frontrunner Mike Braun’s tax plan in an election in which property tax relief continues to emerge as a top priority.
Changes in property tax policy would need approval from the Legislature.
The bulk of her six-pronged plan is focused on exemptions and deductions. Each item, her campaign said, would result in millions of dollars of relief each year.
All homeowners would see the maximum homeowner property tax deduction increase from $2,500 to $3,500. She also proposes growing the exemption for state and local income taxes from $1,000 to $2,500.
Her remedy for ballooning property tax bill growth is to cap bill increases to no more than 10% from the year prior. However, that does not include increases approved through local school referendums.
Similar to Braun’s tax plan, McCormick offers demographic-specific relief.
McCormick would seek to increase the income threshold for seniors over 65 to $40,000 for individuals and $50,000 for households with joint returns, an increase of $10,000 each. The assessed value cap of real property would be raised to $300,000, an increase of $100,000.
The assessed value cap for disabled veterans’ deductions would be increased from $240,000 to $350,000 to expand eligibility.
Renters also would see their income tax deduction expand from $3,000 per year to $4,000.
“Many Hoosiers are struggling to keep up with rising property taxes driven by increased assessed values,” McCormick said in a news release. “Our commonsense plan helps those feeling the pain of property taxes without raiding critical funding that supports our local communities, schools, libraries, police, and fire departments.”
In contrast, Braun’s plan calls for increasing the homestead deduction and capping property tax increases. He also proposed referendum reform tweaks.
Under his plan, Hoosiers with an assessed home value over $125,000 could deduct 60% of their home’s assessed value for property tax purposes through a homestead deduction. Homeowners with an assessed value under $125,000 could use the 60% deduction, plus the current standard deduction of $48,000.
Braun also wants to cap property tax bill increases to 2% for seniors, low-income Hoosiers and families with children under 18. Tax bill increases would be capped at 3% for everyone else. Any property tax increases over the cap would require a referendum.
His plan’s announcement triggered concerns over whether local services would see significant cuts. It was not immediately known how deeply Braun’s proposal would impact local governments, but organizations representing county governments and local schools feared it could be dramatic.
McCormick and her campaign have condemned Braun’s plan, most recently calling it “unserious, reckless, and fiscally irresponsible.”