What happens at the Statehouse certainly doesn’t stay there, and for cities like Gary, the ripple effects are impossible to ignore. As Indiana lawmakers wrapped up this year’s legislative session, several key bills, namely SB 1 and HB 1001, emerged that could reshape how Gary collects tax revenue and even communicate major decisions to residents. Local and state lawmakers warn these changes could threaten Gary’s finances and strain the public school district.
State budget
The long-standing compact between the cities of Gary and Chicago that established the Chicago-Gary Regional Airport Authority is set to be formally dissolved. Under the new legislation, the Gary Common Council is required to take specific steps to terminate the agreement, which was originally enacted in 1995, by Jan. 1, 2026.
By July 1, 2025, a majority of Gary’s appointed representatives to the airport authority must adopt a resolution endorsing the termination, and the Gary Common Council must pass an ordinance to make it official. The law also directs the dissolution of a separate airport authority board previously established by Gary. This marks a significant shift in regional transportation planning and governance, raising questions about the future of the Gary/Chicago International Airport and its role in cross-state economic development.
The Common Council created a new committee to exclusively address state legislation that Council President Lori Latham recognized as a persistent roadblock for Gary’s progress.
“It’s not lost on us that every time we try to either build, establish or maintain an economic development driver in our community that the state has something to say or do about it,” Latham said, addressing the prescribed changes.
Councilman Darren Washington, who will chair the committee, questioned the legality of the bill, stating the council would be conferring with its legal counsel as well as the administration’s.
“‘To arbitrarily, at the last minute — it was literally the night before [the] session ended that language was stuck in House Bill 1001 to put the onus of the Gary Common Council to end the compact,” he said. “I don’t know if that is legal.”
Local state legislators like state Rep. Vernon Smith expressed concern over the bill’s impact on Gary schools.
“I fail to see how this budget invests in our communities and our families,” Smith said in a statement provided to Capital B Gary. “Our schools will have just enough to stay afloat, but they won’t have the funding they need to thrive. Like always with the state legislature, Gary will get little.”
“The funding for urban schools in this budget is insufficient,” Smith continued. “It puts Gary Community School Corporation in a difficult position. The state takeover of our school board due to financial distress just ended in 2024. GCSC has to stay in the black, and the state isn’t doing anything to help.”
New restrictions on property taxes
If the city of Gary or the Gary Community School Corporation wants to raise property taxes through a referendum, they now have stricter rules to follow. These ballot questions — where voters are asked to approve extra funding for things like school improvements or city projects — can appear only during general elections in November. Local officials also have a firm deadline: They must submit the request by noon on Aug. 1 to get it on the ballot. And for school districts in Lake County, including Gary, any referendum passed after May 10, 2023, could require some of that new tax money to be shared with nearby charter schools — even if the vote was intended to support traditional public schools.
Gary’s last referendum vote was during the 2020 general election, when voters approved a $71.2 million property tax measure to support the Gary Community School Corporation.
A new website for help with property taxes
By Jan. 1, 2026, the state will launch an online portal designed to make property taxes easier to understand. For Gary residents and taxpayers across the state, this tool will let residents see how their current property tax bill compares to what it would be if proposed tax rates change in the future. The website will also break down what deductions and credits they might be eligible for and give them a chance to share feedback directly with state and local officials.
State Rep. Earl Harris Jr., who voted against both bills, said he didn’t see any benefit for Lake County.
“Along with the impact of House Bill 1001, Lake County is set to lose hundreds of millions of dollars thanks to Senate Bill 2,” he said. “This budget will do nothing to help Lake County residents, who will pay much more in local income taxes while getting minimal property tax relief. No one wins under this budget.”