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JANUARY 23, 2026
The Big Issues

LOCAL INCOME TAXES
- Aim’s number one legislative proposal is adjusting the local income tax system that was added in SEA 1 to protect all cities and towns from a looming fiscal cliff on income taxes.
- Aim’s proposals for solving this problem have been included in SB 238, authored by Sen. Linda Rogers (R-Granger) and will focus on adjusting the rates cities and towns can levy; allowing more cities and towns to control their own rates; allowing all cities and towns to collaborate with county councils on county-wide rates; and ensuring stability in the rate for long-term budget planning and investments.
- The language included in SB 238 will be considered once again during the second half of the legislative session. HB 1210, authored by Rep. Craig Snow (R-Warsaw), includes some technical fixes to the local income tax system and delays the impact of the new LIT system for one year but does not substantively change the fiscal outlook for any city or town. While it is good that the House bill recognizes that this needs to be delayed and looked at further, it is imperative to change the formula now so that cities and towns can continue to do long-term financial and capital planning with confidence.
- HB 1210 passed the House Ways and Means committee on Thursday with a vote of 23-0.

HOUSING
- HB 1001 creates broad new preemptions around local authority to plan and zone housing projects in an attempt to compel higher-density development strategies and lower costs for housing developers. It preempts density, setback, and parking ordinances that will have a wide-ranging impact.
- It also includes new restrictions on impact fees, which are used to defray the infrastructure costs associated with increased residential development in a community without raising taxes on citizens.
- Cities and towns are primary partners and drivers of housing development in the state which has seen a significant uptick since 2020, even in rural areas, due in large part to investments and development-friendly strategies employed by municipalities within their existing authority.
- Aim opposes large-scale preemption of planning and zoning authority but supports ways that the state, municipalities, and developers can partner to grow and develop our state.
- HB 1001, authored by Rep. Doug Miller (R-Elkhart), will be voted on by the full House on Monday during Third Reading.

MUNICIPAL ELECTIONS
- HB 1055 would give all cities and towns the option to adopt an ordinance that would move municipal elections to the presidential election cycle.
- Aim opposes any attempt to erode the municipal election cycle because holding municipal elections on a separate year from state and national elections ensures that local issues are front and center in those elections and they are not overshadowed by national issues or distorted by straight-ticket votes that are more concerned with up-ballot races.
- HB 1055, authored by Rep. Jennifer Meltzer (R-Shelbyville), passed the House with a vote of 59-35.

COMMUNITY CROSSINGS
- Many municipalities were concerned about the lack of Community Crossings Matching Grant funding that was awarded to Indiana’s cities and towns in the fall of 2025. This set back infrastructure improvement plans in many communities throughout the state.
- SB 179 would allow for an additional $75 million in a 2026 spring call reserved for communities that did not receive funding in the fall of 2025 call.
- Aim supports this bill as it helps ease the transition to the new Community Crossings formula without disrupting expected infrastructure investments throughout the state.
- SB 179, authored by Sen. Mike Crider (R-Greenfield), passed the Senate Appropriations committee on Tuesday with a vote of 12-0.

GOVERNMENT MODERNIZATION
- Aim has been engaged in ongoing conversations with the legislature around methods to modernize the provision of local government services and reduce layers of property tax burden for taxpayers.
- Part of this conversation has involved the modernization of township government, especially in areas that are already well-served by municipal or county services..
- HB 1315 provides new pathways to consolidate townships that have low service delivery loads and provides processes to reorganize townships that are coterminous with municipalities to ensure the most efficient service delivery at the lowest cost for taxpayers.
- Aim will continue to work with the legislature to allow government modernization efforts to proceed intelligently and intentionally to best serve Hoosiers.
- HB 1315, authored by Rep. Alaina Shonkwiler (R-Noblesville), passed the House Ways and Means committee on Thursday with a vote of 15-9.
AIM LEGISLATIVE DINNER
The 2026 Aim Legislative Dinner is just around the corner and we look forward to coming together in Indianapolis for this important annual event that brings municipal leaders and state lawmakers together. Aim members and legislators will be seated together according to their legislative district to encourage conversation and connection. We encourage you to please reach out to your legislators and invite them to this essential event.
Presented by Duke Energy, the Aim Legislative Dinner is excited to be joined by this year’s Keynote Speaker, Pete Yonkman, president of Cook Group and Cook Medical in Bloomington, Indiana (home of the CFP National Champion Indiana Hoosiers). Pete is a lifelong Hoosier and is actively involved in community issues, including adult education, workforce development, fostering start-ups, and creating a business culture that supports entrepreneurs. Prepare to be inspired by how we can achieve excellence together in advancing our cities, towns, and state.
Advance registration is required, and the registration deadline is Wednesday, February 4. Onsite registration is not available. Registration is complimentary for Aim Municipal Members and Legislators. The registration fee for Aim Corporate Members is $199. To RSVP, please contact Brendan Bystry at bbystry@aimindiana.org or (317) 237-6200 ext. 249. Please note that hotel rooms at The Westin Indianapolis are currently sold out. For hotel options, please email Lesley Mosier at lmosier@aimindiana.org.
MARKET STREET TO MAIN STREET LEGISLATIVE PODCAST
Listen to more about this week on the fifth episode of the 2026 Market Street to Main Street Podcast Series, Aim’s legislative episodes of the Hometown Innovations Podcast and a supplement to this e-newsletter. In this episode, Jennifer sits down with Matt to break down the latest developments at the General Assembly and what we expect in to see in this quick, short Session.
To listen to Market Street to Main Street, please visit The Terminal post and click the “play button” on the audio player. Or you can subscribe to Aim Hometown Innovations Podcast on Podbean, Apple Podcasts, and Spotify.
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