In the last column, I shared how the tax system collects and distributes funds and how our organization dedicates more than 60% of its funds to the Greensburg Police and Fire Departments. We touched on the way districts stack on top of each other- from counties, libraries, and schools, to townships, special districts, and cities or towns. When you add these rates together, there is the cumulative tax rate; this is the amount you see on your bill, which is what your assessed value is multiplied by.
First, let's look at what assessed value means. The Decatur County Assessor’s Office conducts assessments. It is an independent office, backed by data. Your assessed value is intended to be the fair market value of your property. I encourage you to look at your assessed value. Then consider whether you would sell your house for that amount. If you think your house is over-assessed, I further encourage you to reach out to a realtor. You may be surprised.
Next in the formula is the tax rate. This is based on where your property is located. School districts, townships, and municipalities all have different rates, as mentioned above. The cumulative rate is what is multiplied by your assessed value. That tax rate for a Greensburg resident was .025942 in 2019, payable in the 2020 tax year. Broken down further, that means it was $2.59 per $100 of assessed value. Now, in 2025, payable in the 2026 tax year, that rate is actually lower: it is .023168, or $2.32 per $100 of assessed value. This means that if your assessed value was the same in 2019 as it was in 2025, you would pay less in property taxes on the straight percent calculation.
Here is where it gets complicated. In Indiana, the Constitution caps homestead (owner-occupied primary residences) property tax at 1% of assessed value. Rental, multi-family, and agricultural land are capped at 2%. Commercial and industrial property is capped at 3%.
We then add all the deductions residents receive under state law or programs, totaling 60% of the assessed value.
For example, we will look at the average property in the City of Greensburg:
The average Greensburg home has an assessed value of $192,000, minus deductions. That leaves about $87,000, which is the amount the tax rate applies to. The most a homestead property can be taxed is 1% of the assessed value, or $1,920 in this example. Even if the tax rate were $5 per $100 of assessed value, the property would still pay no more than $1,920. That $1,920 is divided among six overlapping districts: Greensburg Schools, Decatur County, City of Greensburg, Washington Township, Decatur County Solid Waste, and the Greensburg/Decatur County Library.
Increases in property tax bills are not due to higher tax rates but are due to higher assessed values. Property is worth more; this increase is offset by cost increases in labor, inputs, tires, and, especially, equipment. We have all seen it in our personal lives- prices are higher at Wal-Mart or the car repair shop; local governments are no different. We buy products on the open market, just like you.
Now, the state-mandated changes may affect your residential property tax bill, but that may not translate into actual savings. Under Senate Enrolled Act 1 (SEA 1), 10% of your tax liability, up to $300, will be deducted from the bottom line. This means the average home in Greensburg will receive a $190 tax credit. This is applied to the amount owed, so in the above average home example, that would bring the tax liability down from $1,920 to $1,730. A couple of misconceptions are that the savings would be $300 per person, that the savings would be a direct check to the rate payer, or that the 2026 tax bill would be that amount lower than the 2025 tax bill. This is not the case.
As I mentioned in part one of this series, these changes are impactful. So why is that number not higher for residents? The compounding problem lies within the less-discussed parts of SEA1. The business properties listed in the 2% and 3% categories do not qualify for real property tax credits. They did get an overhaul on how their property inside the buildings is taxed. Part of the long-term stability of communities has been the Business Personal Property Tax (BPPT) on businesses with more than $80,000 in BPPT; now every business under $2,000,000 is exempt from BPPT. Then, by removing the 30% depreciation floor on items, the impact is substantial. Think of it as the annual payment for providing community services to industrial facilities. This reduction in Business Personal Property Tax eliminates significant revenue and passes that burden on to residents. Ball State University economist Dr. Michael Hicks wrote in his January 23, 2026, column for Howey Politics Indiana, “the law eliminated business personal property taxes for 85% of companies.” These organizations pay a higher property tax rate, but do not pay any local income tax. That reduction prevents dollars from flowing into local communities that provide the services and support for their operations, and it shifts the burden to not only their employees, but also onto the community that still has to provide street, fire, planning, code enforcement, police, inspections, etc., despite contributing significantly less to the community.
The third part of SEA1 concerns the change in the local income taxes residents pay. As I mentioned in part one, the Governor and General Assembly discussed property tax reductions and credits, but not the removal of BPPT or changes to local income taxes. Under the income tax changes, the fundamental structure will change. In 2026, as it has been for years, everyone in Decatur County pays the same income tax rate- it doesn’t matter where you live. The rate is 1.77%, plus the special-purpose Decatur County Jail tax of 0.6%. Those funds are distributed to units of government that receive income tax; that distribution is based on an overly complicated formula tied to tax levies. Under SEA1, cities, towns, and counties will each set their own rates. This could total up to 2.9% plus the Decatur County Special Purpose Tax, for a total income tax for some Decatur County residents of 3.5%.
Under the new law, the Decatur County Council could implement 1.2% for its operations, 0.4% for county fire, and 0.2% for non-municipal units. Cities and towns could implement 1.2% on top of that. The taxes levied by the Decatur County Council would apply to all county residents, regardless of whether they live in a municipality. Then, the city or town rate would apply only to municipal residents. This will create a discrepancy for those living in cities and towns, but will still provide services to everyone who visits, works, or shops in our community.
Now, let's add all three parts together and briefly look at SEA1's impacts on the City of Greensburg as a snapshot. The impact of SEA1, even after we implemented our legal cap of 1.2% on local income tax, is a deficit of more than $1,600,000 annually, starting in 2030. That means that while 65% of our budget goes to Greensburg Police and Fire, all departments will have to shave nearly 10% from general funds alone. We are going to be placed in a position where fewer service offerings are a real consideration. In that same article cited above, Hicks said, "nearly all local governments will see tax revenue cuts of 10% or more. A large proportion will see revenues drop by 20% or more, and some face cuts approaching 40%.”
This is the most concerning part for our team. You should be concerned, too. The Indiana General Assembly passed a law that does not actually reduce Hoosiers' total tax burden. It gives corporations a massive break, causes local governments to increase income taxes, prohibits stable funding for services and first responders, and leaves locals trying to pay for existing services.
Local units of government, from townships to schools, libraries to special districts, counties to cities, are in for a rough five years as they try to find a way to provide the services people expect. We are in a place where reductions in force, higher fees, and lower service levels are necessary to keep providing the basic levels of service we have come to know.
For more than seven years, you have heard me say there are three ways to raise funds: cut services, raise taxes, or grow. What I did not expect was what the State would do to the lifeblood of Indiana. Cities and towns are home to more than 70% of Hoosiers, and we have been cut off at the knees. Community growth is a top priority because it is the best way to generate revenue; growth in residential areas brings more income for taxpayers. Commercial and industrial growth drives modest property tax growth, while also creating jobs that boost residential demand. Large-scale economic projects bring economic impact agreements, infrastructure upgrades, and direct investments. This growth should be supported by everyone who relies on a local government unit. The larger the community's assessed value, the lower the rate can be to provide the necessary services at the level we expect. Without community growth, this negative impact passed down to us gets worse. Cuts get deeper. Service levels further decline. Taxes and fees increase. Facilities close.
If you have made it this far, you are probably looking for a light at the end of the tunnel. We are all looking for that light. To be fair, there is a responsibility as a community leader that serves as our cheerleader; that’s the best part of the job. There is also a responsibility to be the realist who works to solve the problem that keeps our team working efficiently, provides the best services we can, and keeps all the balls in the air. We cannot ignore any part of our operation or community, including continued community involvement, economic development, trash service, and hosting amazing community events. Like you, I look forward to calling Greensburg home for years. All aspects of our organization and our fellow local governments must ensure we continue making strategic investments that serve all facets of our community.
I am optimistic that we will find a path forward to balance the interests of residents, the services we provide, and the future of our community. Governments often prepare for worst-case scenarios, and I am optimistic that the worst-case scenario can be overcome with the support of residents, other local units, the city council, and our team. We all want what's best for Greensburg and Decatur County, but very hard conversations and decisions are coming; we are better served to be prepared and proactive.
I think Mayor Angie Nelson Deutch of Michigan City, who is my Indiana Conference of Mayors Vice President, summarized it well in a column written for the Times of Northwest Indiana on February 1, 2026, "When cities are forced to plan around sudden fiscal cliffs, the consequences are real. Infrastructure maintenance gets delayed, equipment replacement is postponed, and capital improvements slow. Pressure builds on public safety and core services residents rely on every day. These impacts do not stay confined to spreadsheets - they show up in daily life and often cost more in the long run."
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