Mayor Stephanie Terry today delivered her proposed 2026 City of Evansville budget to the Evansville City Council, outlining a $140.2 million General Fund plan that prioritizes core city services while responding to new fiscal challenges created by changes to state tax policy.
The Council is scheduled to hold two public readings of the budget: the first at its September 22 meeting, and the second – including a final vote, with any Council-led changes – at its October 6 meeting.
“Budgets are about values,” Mayor Terry said in presenting her proposal. “This budget reflects what we hear consistently from our residents: Take care of the basics. Roads. Safety. Housing. Parks. And make government work better for the people we serve.”
The proposed general fund budget includes modest growth of only 1.6% over FY 2025, while continuing to support core priorities like: strong public safety, infrastructure and neighborhood revitalization, accessible housing, and efficient government services. That increase reflects a commitment to honoring union contracts, meeting cost-of-living adjustments, and covering rising costs in supplies, materials, equipment, and utilities.
It also builds on historic investments made in 2025, including increases to the Affordable Housing Trust Fund, expanded street paving, and new investments in public safety and parks.
The 2026 budget, however, is being delivered under new financial pressures. A recent change in state law, Senate Enrolled Act 1, reduces property taxes for homeowners but will cost the City of Evansville approximately $4.1 million in annual General Fund revenue next year.
“While tax relief is welcome news for many families, this particular law creates a serious budget gap for cities like ours,” said Mayor Terry. “And unfortunately, the options provided by the state involve raising income taxes, which would shift the burden to renters and working families who might not even benefit from the property tax cut.”
To address the shortfall without raising taxes, Mayor Terry proposed a three-part strategy:
- Strategic use of reserves, particularly casino revenues, to temporarily offset the impact;
- Operational efficiencies, including reduced capital spending, delayed vehicle replacements, and better use of internal resources;
- Ongoing innovation, including investments in technology, EMS services, and data-driven decision-making to modernize government operations.
Importantly, the proposal does not include any income tax increases or service reductions.
“We are tightening our belts where we can, protecting the services our community depends on, and continuing to fight for state-level fixes to SEA 1,” Mayor Terry said. “This is about responsible stewardship of our dollars, our infrastructure, and our future.”
