Mishawaka schools brace for revenue losses under new state property-tax law

MISHAWAKA, Ind.-- As the year comes to a close, School City of Mishawaka officials are preparing for significant revenue losses tied to Senate Enrolled Act 1, a new state law that shrinks the amount of taxable property value used to fund local school districts.

During a school board meeting Wednesday, analysts from Policy Analytics LLC outlined projections showing the district’s tax base will begin to decline in 2026. The drop stems largely from new deductions and credits for homeowners. While those changes reduce what homeowners owe, they also reduce the revenue schools rely on for daily operations and future referendum funding.

“It is tough news to deliver, but at least you can see it coming,” said Addie Hanchett, a senior fiscal analyst with Policy Analytics. 

Though the law takes effect in January, the steepest financial hit is not expected until 2028, giving administrators time to evaluate their options. Superintendent Theodore Stevens said the district is already looking for ways to trim costs.

“Can we put off getting another boiler, HVAC system, something like this?” Stevens said. “When employees retire or resign, do we need to replace them?”

Analysts told the board that by 2028 — when the law will also require school corporations to share revenue from their operating levy with charter schools — School City of Mishawaka could lose more than $1 million.

“We’re one of the worst impacts she has seen,” Stevens said. “When you look at the boundaries we have and … the properties, businesses and things of that nature within those boundaries, we are at a disadvantage. One of the major reasons we’re in the predicament we’re in is because we have such a small property-tax footprint to draw from for our nine schools here in Mishawaka.”

District leaders say they will continue modeling the financial impact of the law and plan to share more information with families as the next school referendum approaches.