LEGISLATIVE SERVICES AGENCY
OFFICE OF FISCAL AND MANAGEMENT ANALYSIS
FISCAL IMPACT STATEMENT
LS 6346 NOTE PREPARED: Feb 6, 2025
BILL NUMBER: HB 1131 BILL AMENDED: Jan 28, 2025
SUBJECT: Town of Cumberland.
FIRST AUTHOR: Rep. Miller D BILL STATUS: CR Adopted - 1
st
House
FIRST SPONSOR:
FUNDS AFFECTED:XGENERAL IMPACT: State & Local
DEDICATED
FEDERAL
Summary of Legislation: This bill provides that on January 1, 2027, the Town of Cumberland is an
excluded city and no longer part of the consolidated city. It requires the town legislative body and the
legislative body of the consolidated city and county to take any steps necessary to transition the town to an
excluded city. The bill requires the Department of Local Government Finance (DLGF) to adjust property tax
levies, rates, budgets, and distributive shares of local units of local government as necessary to account for
the town becoming an excluded city.
The bill also provides that:
• After December 31, 2026, any part of the town that is included in a fire protection district on
December 31, 2026, that is located in the county containing the consolidated city, shall continue to
be included in the fire protection district.
• After December 31, 2026, the town is liable for debt service owed by the consolidated city on
December 31, 2026, in the same ratio as the assessed valuation of the property in the town bears to
the assessed valuation of all property included in the consolidated city until the particular debt
service is satisfied.
Effective Date: July 1, 2025; January 1, 2027.
Explanation of State Expenditures: DLGF: This bill’s provisions will result in a minor increase in the
administrative workload for the DLGF. The DLGF would need to adjust maximum permissible property tax
levies, rates, and budgets of the applicable units of local government in Marion County as necessary to
account for the Town of Cumberland becoming an excluded city.
Explanation of State Revenues:
Explanation of Local Expenditures: This bill’s provisions will result in a temporary increase in the
administrative workload for the respective legislative bodies for the Town of Cumberland and the
Consolidated City of Indianapolis. The legislative bodies for both of these entities would be required to take
HB 1131 1 any necessary steps, including adopting ordinances, resolutions, and entering into interlocal agreements, to
enact the transition of the Town of Cumberland from an included town to an excluded city.
Explanation of Local Revenues: Starting in CY 2027, the real and personal property owners in the one
taxing district in Marion County that incorporates the Town of Cumberland would no longer pay the tax rate
for the Consolidated City of Indianapolis local unit in Marion County, with the exception of the tax rate
associated with the debt service levy for the Consolidated City of Indianapolis. Property owners would
continue to pay the debt service levy tax rate until such time the debt obligations as of December 31, 2026,
for the Consolidated City of Indianapolis local unit have been paid in full. Also, the bill’s provisions would
require property owners in the taxing district to continue to pay the certified tax rate for the Indianapolis Fire
Special Service District.
This bill’s provision would result in a decrease in property tax revenue distributed to the Consolidated City
of Indianapolis local unit. The actual impact on property tax revenue will be contingent on factors such as
the certified levy and tax rate for the Consolidated City of Indianapolis and the assessed value base for the
portion of the Town of Cumberland in Marion County.
Additionally, as an excluded city, the Town of Cumberland would be eligible to receive a portion of the
certified shares revenue generated by the local income tax rate in Marion County - in the same manner as the
other excluded cities in Marion County. The actual impact on certified shares revenue will depend on the
terms of the interlocal agreements, resolutions, and ordinances involving the Town of Cumberland and the
Consolidated City of Indianapolis as they pertain to the local income tax allocation formula in Marion
County.
[For CY 2024, the one taxing district in Marion County that incorporates the Town of Cumberland includes
a total certified tax rate of $0.0426 and a certified levy of $38,764 for the Consolidated City of Indianapolis
local unit.]
State Agencies Affected: Department of Local Government Finance.
Local Agencies Affected: Town of Cumberland; Consolidated City of Indianapolis. Local units of
government in Marion County.
Information Sources: CY 2024 Marion County property tax abstract data.
Fiscal Analyst: James Johnson, 317-232-9869.
HB 1131 2