Lake County councilman outlines ways to buffer impact of Indiana's property tax changes
Senate Enrolled Act 1 was a property tax bill that will save two-thirds of taxpayers up to $300 on their 2026 property tax bill while local governments will lose $1.4 billion through 2028. Gov. Mike Braun signed the bill into law April 15 and called it a 'historic' plan to reduce property taxes for most Hoosier homeowners while limiting future tax hikes and making the tax system fairer and more transparent.
The county will feel the fiscal impact of Senate Bill 1 in the 2028 budget year, Niemeyer said, as the county is projected to lose $30 million by 2028 and $50 million by 2030. Niemeyer, R-7th, said he reviewed the proposal with local elected officials and Lake County Finance Director Scott Schmal.
Senate Bill 1 will eliminate the property tax replacement credit by Dec. 31, 2027, change the business personal property tax structure, eliminate the current local income tax expenditure rate by Dec. 31, 2027, and adopt annual local income tax rates after Dec. 31, 2030, Niemeyer said.
The Lake County local income tax was adopted in 2013, and the state legislature mandated that the county use 1% of the local income tax for property tax relief, 0.25% for community economic development and 0.25% for public safety. The new property tax law removes the requirements, Niemeyer said.
To achieve a 1% tax cut, Niemeyer said every department and service has to be modernized, every revenue source has to be used to move the county away from relying on property taxes levy and income taxes, and each spending request 'must be justified for the provision of the essential county government services.'
'We have more than enough, even cutting 1% of the LIT after 2027, to fund this government and to move it forward in a productive fashion,' Niemeyer said. 'I suspect that over the next decade we're going to continue to see the system of funding of local government move away from property tax levies and move more toward user fees, income taxes, sales taxes and the like. This is a great start for us to go in that direction.'
When Niemeyer ran for the First Congressional District in 2024, he said he visited all three counties and he could 'count on one hand' the number of people who wanted to talk to him about property taxes.
'The narrative that local government is somehow hoarding cash and ripping off taxpayers is simply false,' Niemeyer said. 'Nonetheless, we are presented with a tax reform package that creates multiple challenges for local government.'
As the council, the county's fiscal body, approaches the 2026 and 2027 budget years, Niemeyer proposed that the council conduct a detailed examination of all revenue sources and statutes to then determine which general fund expenditures could be shifted to non-levy funds.
The council should use 2025 budgets as the baseline for 2026, Niemeyer said, with any raises or office reorganizations offset by fiscal cuts. The council should also look for possible reorganization or staff reduction in all departments as the Oracle system comes online, he said.
To address staffing, Niemeyer said the council should look for instances where contractors and employees are doing the same or similar work. He'd also like the council to review all positions being paid supplemental pay from the general fund and miscellaneous funds, and to move those positions out of the general fund where possible and eliminate supplemental pay.
Further, Niemeyer would like the council to meet the first Tuesday in September for a 'budget building day' in place of the common practice of budget presentations. The only department heads that would have to attend would be those who request an increase in their budget, he said.
As the county addresses the 2028 budget, Niemeyer would like the county to eliminate 1% of its local income tax used to provide the expiring property tax replacement credit. With the remaining 0.5% of the local income tax, the county should allocate those funds for public safety to be distributed to townships for EMS and fire protection, he said.
By the 2028 budget, the county can also consider adopting a local income tax based on county government needs, Niemeyer said.
'This year is an important year to set some new budget fundamentals that will help to guide us through these next three years,' Niemeyer said. 'These are just ideas. Everybody is free to agree, disagree. I did this work as a way just to … get this process moving.'
Council President Christine Cid, D-5th, said she appreciated the hard work Niemeyer put into the outline. The council has asked department heads to stay within their 2025 budget as they prepare their 2026 budget, Cid said.
Cid said she would support eliminating the 1% income tax 'to lessen the burden on our community who would pay these additional taxes, not receive property tax relief, and the increase of the cost of living in today's economic environment.'
'But, in order to eliminate the 1% income tax which currently offers property tax relief, the county would need to continue to collect property taxes,' Cid said.
Councilman Ted Bilski, D-6th, said the council received Niemeyer's proposal ahead of the meeting, so he would review it closely in the coming days. But Bilski said he appreciated the hard work that Niemeyer put into the proposal.
'We're facing tough times. We have to do due diligence. Everything has to be considered,' Bilski said.
The council also voted unanimously to approve an increase in the county's allowance for veteran's grave markers. Before the vote, the board voted to amend the ordinance to include a 2-year deadline, from the time of the veteran's death, to receive the allowance.
The county's current burial allowance for a deceased veteran is $150, which would increase to $225 under the ordinance. The county's current burial allowance for the deceased veteran's spouse is $100, which would increase to $150 under the ordinance.
The ordinance also increases the grave marker allowance for a veteran and the veteran's spouse from $60 to $90.
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