The Indiana DLGF has now certified Marion County's 2026 budget order, which means the tax rates that hit Indianapolis property tax bills this fall are locked in. For most Marion County homesteads, the headline numbers improved — the SB 1 $300 homestead credit and expanded supplemental deduction cushion the bill — but the mix of where each tax dollar goes shifted materially.
Understanding the mix matters more than the headline. The same $1 of property tax pays for fundamentally different services in 2026 than it did in 2025, and the trend lines tell you where the next few years of pressure are coming from.
The certified rates at a glance
Marion County's overall composite tax rate ranges from roughly $3.00 to $4.50 per $100 of net AV depending on the township and taxing district within it. The variance is almost entirely a function of the school corporation, with secondary impact from the township and any city overlay.
A homestead with $200,000 net AV (post-deductions) in Center Township / IPS pays meaningfully different total tax than the same AV in Washington Township / MSD Washington, even though both hit the 1% homestead cap before the rate is applied.
Where each $1 of tax goes (typical Marion homestead)
For a Center Township / IPS homestead — the largest single category of Marion parcels — the 2026 dollar splits roughly as follows. Districts vary, but the proportions are representative.
| Recipient | Approximate share of each $1 | What it funds |
|---|---|---|
| School corporation | ~$0.42 | Operating fund, capital projects, debt service for the school district |
| City of Indianapolis | ~$0.20 | General fund, public safety (IMPD, IFD), parks |
| Marion County | ~$0.13 | Sheriff, courts, jail, county-wide services |
| Library | ~$0.05 | Indianapolis Public Library |
| IndyGo / transit | ~$0.04 | Transit operating + capital |
| Township | ~$0.04 | Fire (where township-organized), poor relief, small civil functions |
| Health & hospital (HHC) | ~$0.06 | Marion County Public Health Department, Eskenazi |
| Debt service | ~$0.05 | Bonded indebtedness across the above units |
| Misc. special districts | ~$0.01 | TIF allocations, conservancy districts where applicable |
Two things stand out compared to 2025:
- School share is up. Schools moved from ~38–39% of the dollar in 2025 to ~42% in 2026. Not because schools got more — they didn't, the levy is frozen — but because the levy denominator (the city/county/library side) absorbed more of the SB 1 deduction expansion. The school share grew by holding steadier than everything else.
- Township share is down. Several Marion townships shed administrative functions to consolidated county or city units; township fire in particular continues to consolidate.
How the levy freeze played out
SB 1 froze the operating levy at 2025 dollar amounts for every Marion taxing unit. That means:
- IPS, MSD Lawrence, MSD Pike, MSD Washington, MSD Wayne, MSD Warren, MSD Perry, MSD Decatur, and Franklin CSC operating levies are all capped at 2025 numbers in 2026
- Marion County, the City of Indianapolis, IndyGo, the Library, and HHC operating levies are similarly capped
- Debt service levies are exempt from the freeze — bonded obligations still get paid as scheduled
- Referendum-passed levies (a few of the school districts have operating referendums) are exempt from the freeze for the duration of the referendum
The mechanical result: with AV growing across Marion County in 2026 but levy frozen at 2025 totals, rates dropped in most districts. Lower rates × bigger AV = approximately flat dollar levy.
For homestead owners, the bill drops modestly. For non-homestead owners (rentals, second homes), the math is different — the 2% non-homestead cap doesn't get the homestead credit, so the bill is essentially "what the assessor and rate produced," which fell slightly on rate alone.
What changed by recipient
Indianapolis Public Schools (IPS)
IPS faces the largest cap-loss exposure in Indiana — its serving footprint sits squarely in Center Township, the highest-rate township in Marion County and one of the highest in the state. Most IPS homestead parcels are cap-bound at 1%, which means IPS's certified levy goes uncollected by a growing margin. Marion County's cap-loss-to-IPS analysis covers this in depth. For the 2026 budget order, IPS continues to absorb the largest absolute dollar of cap loss in the state.
City of Indianapolis
The city's share held roughly steady. Public safety (IMPD/IFD) is the largest line and is essentially protected. The bigger story is what the city did not receive: replacement LIT revenue from the City-County Council (covered separately in our Marion replacement LIT decision post) shifted general-fund pressure for 2027.
IndyGo
Transit's share grew modestly. IndyGo's Red Line, Purple Line, and Blue Line capital obligations continue, with debt service insulated from the levy freeze. The 2026 budget order maintained transit's roughly $0.04 per dollar share.
Health & Hospital Corporation (HHC)
HHC's levy supports the Public Health Department and Eskenazi Health. With public health rebuilding capacity post-pandemic, HHC pressed for a modest share increase; the budget order largely preserved 2025 share with small allocations for clinical infrastructure.
Library
Roughly flat. The library system has been a quiet success story in Marion — stable levy, consistent service, no contested budget hearings.
Townships (combined)
Township share continues to compress. Center Township carries the heaviest absolute township levy because of population, but per-parcel township collection is small. The functional consolidation of fire and emergency services into county/city-aligned districts means township levies are slowly drifting downward as a share of the dollar.
What this means for an Indianapolis homeowner
Run the math for a representative homestead with $250K assessed value in Wayne Township / MSD Wayne in 2026:
| Step | Value |
|---|---|
| Gross AV | $250,000 |
| Standard deduction | −$48,000 |
| Supplemental deduction (~40%) | −$80,800 |
| Net AV after deductions | $121,200 |
| Composite Wayne / MSD Wayne rate (illustrative) | $3.85 / $100 |
| Calculated gross tax | $4,666 |
| 1% homestead cap on $250K | $2,500 |
| Tax owed (cap binds) | $2,500 |
| $300 homestead credit | −$300 |
| Net property tax | $2,200 |
The composite rate matters mechanically — it determines whether the cap binds. In this example, the rate is high enough that the cap binds; the homeowner owes the capped amount minus the SB 1 credit.
For high-AV homes in lower-rate districts (e.g., $500K home in Decatur Township), the cap doesn't always bind and the rate-vs-AV math is the live variable.
What to do
- Pull your 2026 tax rate from the Indiana property tax transparency portal — the new portal makes line-item district rates accessible for any parcel.
- Compare to 2025 — if your rate is up despite the levy freeze, your taxing district likely has growing debt service or referendum obligations not subject to the freeze.
- Confirm your homestead credit is on the bill. If you don't see the $300 SB 1 credit, contact the Marion County Auditor.
- Project your fall installment using net AV × rate, then check it against the 1% cap.
Related reading
- Marion County 2026 Form 11 notices: April 28 mailing
- Marion County's 9 townships: rate variance explained
- Marion County's $300M cap loss and IPS funding
- Indianapolis property tax cap exposure explained
- Indiana SB 1 reform: what changed for 2026
- Indiana property tax rates by county 2026
- Marion County overview