INDIANAPOLIS—Today, the Senate Tax and Fiscal Committee met to amend and vote Senate Bill (SB) 1 and SB 518, with many concerns about financial impact on public schools and local governments.

Senator Fady Qaddoura (D-Indianapolis), ranking minority member of the Tax and Fiscal Committee, warned that both of the bills would significantly reduce local revenue streams, straining funding for public schools and essential services.

Additionally, SB 1 would cut taxes across the board for homeowners but remarkably decreases the dollars local units receive from property taxes, without a way for locals to make up this lost revenue.

“Although I appreciate the amendment proposed to help fix SB 1 to minimize the impact of revenue losses on local units of government and school corporations, the combined impact of both bills will result in more than $200 million in revenue losses to traditional schools over the next three years,” said Qaddoura. “We support property tax relief for all Hoosiers, especially senior citizens, veterans and low-income families, but we must consider the full impact of all legislation on citizens, local services and schools.”

Moreover, Qaddoura criticized the bill for failing to include renters’ relief, despite renters making up 27% of Indiana’s occupied housing units as of 2023.

“One group consistently left out of these discussions is renters,” said Qaddoura. “Renters still pay property taxes, through their monthly rent.”

SB 1 now includes several provisions that have been introduced by Senate Democrats over the past few years including first time homebuyers’ credit, increasing credit for senior citizens and creating a tax payment plan option to support low-income households.

Meanwhile, SB 518 would force public schools to share local referendum dollars with charter schools, a move Qaddoura described as an unfair shift.

“SB 518 targets urban schools by diverting local property tax funding from traditional public schools to charter schools that are managed by unelected school boards,” said Qaddoura. “In addition, the bill does not provide any guardrails or regulations to hold charter schools accountable similar to traditional schools. The uncontrolled proliferation, and frequent closures, of charter schools in urban areas seriously threatens the educational process of our children, especially minority children, by diverting funding away from traditional schools.”

“Shifting school funding from the state to local taxpayers undermines SB 1’s promise of tax relief and could force higher local taxes to cover the shortfall,” said Qaddoura.

“We will continue to work with our colleagues in a bi-partisan fashion to ensure that the impact of all tax bills that are moving through the legislative process balances the need to provide property tax relief without harming funding of public schools or hindering local government’s ability from providing critical services such as fire and police services,” said Qaddoura.

SB 1 passed with a vote of 10-3 and SB 518 passed with a vote of 10-4 moving both to the Senate Floor for Second Reading.