Local elected officials from around the region join statewide effort to address unintended consequences of sweeping 2025 property and income tax legislation
EVANSVILLE, INDIANA – Local elected officials from across the region gathered today in Evansville to discuss the real-world impacts of Senate Enrolled Act 1 (SEA 1) on their communities and urge the Indiana General Assembly to make critical fixes to the legislation during the 2026 session.
The roundtable, organized by Accelerate Indiana Municipalities (Aim), brought together a bipartisan group of municipal officials to share how the 2025 law, introduced as a vehicle for property tax relief, is creating budget uncertainty, impacts to essential services, and long-term concerns about the viability of cities and towns.
“Looking ahead, Mishawaka’s fiscal impact from SEA 1 could amount to $15 Million or 20% of our General Fund,” said Mishawaka Mayor Dave Wood. “Of course our top priority in determining how to cut the budget will be protecting public safety. But the reality is, we could eliminate all other city departments and still have to cut into public safety to find this level of savings.”
Local leaders report that the law’s unintended consequences have impacted cuts to public safety, and EMS services, road maintenance, and other basic municipal services. As written, the legislation also creates particular challenges for smaller municipalities under 3,500 residents, which must now petition their counties annually for revenue distributions, introducing increasing instability into local budgeting.
Additional pressing concerns included:
- Annual adoption requirements creating budget instability
- Lack of reliable revenue projections from the State for 2026, 2027, and 2028 budgets
- Rate splits favoring counties over municipalities
- Challenges for municipalities under 3,500 residents
- Technical issues with debt coverage and TIF neutralization
- Government modernization and efficiency measures
Noblesville Mayor and Chair of Aim’s Legislative Committee Chris Jensen emphasized that local officials are not opposed to system reforms that offer property taxpayers relief. “Indiana’s municipal leaders will always advocate for the people of our communities. This sentiment is not at odds with our advocacy for a municipal revenue system that contemplates a balanced approach of affordability and adequate funding to provide the safety and quality of life the people of our communities expect and demand.”
While the meeting reinforced the fiscal realities of SEA 1, Aim staff revealed a list of technical amendments to SEA 1 that would preserve the policy goals behind the new law while offering more flexibility for local units to continue providing the services and programs their communities need. And tackling calls from the legislature for all units to look at local service delivery models to find savings and innovations, Aim revealed several important measures, such as amending the government modernization statute to make restructuring less complicated and more flexible.
“The Governor and legislature build the policy framework for our state. Local leaders understand this and want to partner with lawmakers and state leaders to ensure all cities and towns have the greatest chance of success under the new fiscal system created by SEA 1,” said Aim CEO Matt Greller. “Our conversations over the summer leave me hopeful that our proposed adjustments will be received in the cooperative spirit in which they are given. Further, I’m optimistic that providing significant modernization and efficiency recommendations, in addition to our SEA 1 fixes, shows lawmakers we heard their concerns and responded with ideas for their consideration.”
The Evansville roundtable is one of ten being held across Indiana in November, including stops in Mishawaka, Schererville, West Lafayette, Speedway, Terre Haute, Evansville, Jeffersonville, Fort Wayne, Richmond, and McCordsville. The events are part of a coordinated effort to educate legislators about local impacts and build support for legislative fixes before session begins in January 2026.
