A surge of service elimination announcements and a record number of local ballot measures are translating the projected impact of Indiana's 2025 property tax overhaul into concrete consequences for students and families. Senate Enrolled Act 1, signed by Governor Mike Braun in April 2025, expands homestead deductions and credits but reduces the taxable assessed value available to school corporations. The nonpartisan Legislative Services Agency estimates that Indiana public schools will lose $744.4 million in property tax revenue from 2026 through 2028, with $336 million of that loss occurring in 2028 alone. The deductions phase in annually through 2031, meaning the fiscal pressure is expected to increase.
Districts announce cuts to transportation, sports, and staff
Several districts have moved from warnings to action. Tri-Creek School Corporation in Lake County announced it will eliminate all school bus transportation effective August 1, 2028, and will end all school-sponsored sports and extracurricular clubs for grades K-8 effective August 1, 2027. The district cited a $3 million deficit caused by SEA 1 and said additional cuts to high school sports, classroom instructional support staff, and student safety programs are pending.
Mississinewa Community School Corporation presented a board document in December 2025 stating that it faces a $1.5 million annual funding deficit by 2028. The corporation's operations net levy would fall from $2.2 million before the law to $1.4 million after it, or $636 per student compared with the state average of $1,584. The board said it must either pass an operating referendum in November 2026 or eliminate transportation, which costs approximately $1.2 million annually, after the 2026–27 school year.
West Noble School Corporation, which serves about 2,200 students, is considering closing West Noble Primary School in 2027. The school enrolled 350 students through first grade. The district's property tax cap loss is estimated to nearly triple to $400,000 next year, and it is reducing bus purchases from an average of three per year to one.
Northeast Indiana districts are also reporting sharply higher property tax cap losses under the existing circuit breaker system, which the new law compounds. Fort Wayne Community Schools estimates its loss will rise to $10.8 million from $4.9 million this year. Northwest Allen County Schools faces an increase to $2.7 million from about $940,000. Warsaw Community Schools expects its loss to roughly double to about $2 million. DeKalb County Central United expects a loss of about $870,000, up from roughly $121,000. For Adams Central, a $251,600 loss represents nearly 9 percent of its $2.8 million operations fund levy.
Record number of districts ask voters to replace lost revenue
A record 38 Indiana school districts have placed referendums on the November 2026 ballot. The Indiana Capital Chronicle reported that, if all pass, the operating levies would collectively generate about $500 million in annual property tax revenue. The certification deadline of August 1, 2026, has passed, and most filings are for operating referendums. The School City of Whiting also seeks a construction levy, and Wa-Nee Community Schools seeks a safety referendum. Many districts explicitly cite SEA 1 as a major factor.
The Indiana Department of Local Government Finance's official referendum information page lists filings from districts including Indianapolis Public Schools, Carmel Clay Schools, Noblesville Schools, Hamilton Southeastern Schools, Zionsville Community Schools, and many others across more than 20 counties.
Carmel Clay Schools placed an operating referendum on the ballot with a maximum rate of $0.4274 per $100 assessed valuation and a maximum annual levy of $61,981,519 for up to eight years. The district revised its projected SEA 1 losses upward from $94 million to approximately $120 million over eight years, or about $15 million annually. For a median home assessed at $500,000, the referendum would increase annual property taxes by $1,062.
Noblesville Schools placed an operating referendum with a maximum rate of $0.57 per $100 assessed valuation, generating up to $43,842,578 annually for up to eight years. The district's filing explicitly cites reductions in property tax revenue as the purpose. For a median home assessed at $350,000, the increase would be $955 per year.
Legislative context and compounding effects
The 2025 law builds on property tax caps enacted in 2008, known as circuit breakers, which cap homeowner property taxes at 1 percent of gross assessed value. According to Chalkbeat Indiana, historical figures from the Legislative Services Agency show those caps have cost school districts statewide more than $4 billion in lost revenue since they took effect. SEA 1 adds deductions on top of these existing caps, compounding the erosion.
Governor Braun's original property tax proposal, which preceded SEA 1, would have stripped approximately $1.9 billion from Indiana school districts over three years by capping tax increases at 3 percent and increasing the homestead exemption, according to Indiana Public Media. The Senate Republican revision reduced the impact. An earlier version of the plan projected $371 million in school district losses from 2026 through 2028, but the enacted law's estimate rose to $744 million.
Indiana legislative leaders said in November 2025 that they will likely tweak elements of SEA 1 after widespread opposition from cities, towns, and school districts. Under the current law, the maximum tax credit a typical homeowner can receive is $300.
What the evidence shows about district impact
A survey conducted by the Indiana Coalition for Public Education, completed by 148 of the state's 290 traditional public school corporations, found that 95.3 percent of districts expect SEA 1 to negatively affect funding in 2025 and 99.3 percent expect negative effects in future years. The survey, which closed on November 6, 2025, reported that 65.3 percent of districts have reduced or will reduce support staff, 55.8 percent have reduced or will reduce teaching staff, and 40.8 percent have reduced or eliminated planned facility improvements. Including districts that are considering such reductions, over 90 percent reported that cuts to staffing or facilities are under consideration. The survey is a superintendent self-report and not a peer-reviewed study.
The Legislative Services Agency's estimate of a $744.4 million loss over three years is considered an official state fiscal projection. Actual losses will depend on assessed value growth and other variables. The Indiana Coalition for Public Education, which published the estimate, cited the agency as its source.