A common question we hear is: “With all this new development happening in Merrillville, shouldn’t the town be collecting a lot more property tax money?” The answer is a surprisingly no, and it’s due to the way Indiana’s tax system works.
1. Indiana Caps What Merrillville Is Allowed to Collect
Indiana does not let towns simply collect more property taxes just because new buildings or businesses go up.
Each year, the State sets a maximum levy—this is the total amount Merrillville is allowed to collect for its general fund.
Even if property values go up or new neighborhoods are built, our levy limit doesn’t automatically increase.
Think of it like the State giving us a fixed-size pizza each year.
Even if we add more people to the table, the pizza itself doesn’t get any bigger.
2. New Development Doesn't Increase the Pizza - It Just Adds More People Helping to Pay for It
When a new home, business, or apartment complex is built, that new taxpayer joins everyone else in paying their portion of the levy.
But the total amount Merrillville receives doesn’t grow.
What does change is this:
- More taxpayers = smaller slices for each individual taxpayer.
- That means existing homeowners are protected from larger increases, because the cost of running the town is being shared among more people.
So instead of making the pizza bigger, new development makes more people chip in to pay for the pizza we already have.
3. Why Development Still Helps
Even though our general fund doesn’t automatically rise, development is still extremely valuable:
- It broadens the tax base, helping keep rates stable and predictable.
- It can support incremental growth of the levy over time when population and assessed value increase.
- Stores, offices, and housing developments bring jobs, amenities, and economic activity.
- Some developments pay fees, utility charges, or support TIF districts that invest back into local roads and infrastructure.
4. Bottom Line
New development does not create a windfall for Merrillville’s general fund because of Indiana’s levy limits.
But it does help all taxpayers by spreading the cost of government services across a larger tax base — keeping taxes fair and stable for everyone.
-Rick Bella, Town Council President – Ward 5 Representative