Snow plow maintenance, sheriff’s office vehicle replacements, food pantry support and raises for local government employees.
These were just some of the areas local officials warned could take a hit under Senate Enrolled Act 1 at a virtual town hall Saturday.
The event, “It Takes a Village,” was sponsored by groups including Reverse Citizens United of Monroe County, Indiana Rural Summit, Monroe County Democrats’ Club and Organizing Indiana. Over 100 people attended via Zoom.
The town hall revolved around the continued impacts of SEA 1, a property tax relief law signed by the governor last year. It gives tax credits to homesteads, reducing their property tax bill by 10%, and increases exemptions for personal property taxes for businesses. It also slashes how much local income tax governments can collect by lowering the maximum rate from 3.75% to 2.9%.
Speakers expressed concerns about the bill’s impacts on public services, infrastructure and tax rates. The bill’s author, Republican Sen. Travis Holdman, said it was important to provide a fair balance between local government’s needs and those of homeowners and to promote transparency.
State Rep. Matt Pierce, a Democrat representing Bloomington, said at the town hall the wealthiest Hoosiers are benefiting the most from the law, whereas those whose homes have low assessed value get little property tax relief and will likely end up paying a larger chunk of income in income tax.
“The tax and fiscal policy, the state is not working to move our state forward, and it’s not investing in individual people,” Pierce said. “It’s creating wider income gaps.”
Bloomington Mayor Kerry Thomson also spoke on the bill, saying she anticipated residents would end up paying more taxes than before SEA 1 was passed once the city implements local income taxes to recover some of the lost property tax revenue.
She said the city was seeing a $1.4 million loss in the 2026 budget, which it anticipates will grow to $30 million in lost revenue in two and a half years. She said the city would continue to focus on meeting the basic needs of its residents and stretching existing funds to make them last longer, but it would increasingly struggle to fill social service gaps.
Bloomington City Councilmember Hopi Stosberg said it was hard to say what she would suggest cutting from the budget. If the city raises income taxes to recover revenue from property taxes, she said, that’s just shifting the tax burden in ways that are “really uncomfortable.”
Her spending priorities included keeping streets safe and clean, clean water, emergency services, trash pickup, fair salaries for city employees and operational transportation corridors.
County officials shared those sentiments. Monroe County Councilmember David Henry said SEA 1 puts the county council in a horrible situation to choose which of the community’s essential services get prioritized. The Board of Commissioners have had to pull back from funding projects like rural internet productivity, Commissioner Jody Madeira said.
“We’ve had to pivot in just sometimes fighting for basic services,” she said.
Monroe County Sheriff Ruben Marté said the sheriff’s office has always been conservative with taxpayer dollars, trying to save costs in jail kitchens and on patrol vehicles. But as a result of SEA 1, he said, the office may need to delay vehicle replacements and technical upgrades.
“The areas most at risk are not extra,” Marté said. “They are staff, training, equipment and core public safety services.”
He said in order to adapt, the sheriff’s office will prioritize public safety, emergency response, jail security and policing. Discretionary spending, he said, will be reviewed by the office before funding shortages compromise frontline services.
Township trustees worried their services could also take a hit. Benton Township Trustee Michelle Bright said that if townships receive less or no funds from local income taxes due to SEA 1, the budget might have to be cut by one-third. The township would have to start reducing non-essential services, such as cemetery mowing, she said.
Efrat Rosser, Bloomington Township Trustee, said she estimated an immediate revenue loss from SEA 1 of about 5% of the township’s budget, or $15,000. She said due to the loss, the township wouldn’t be able to add part-time support for a food pantry or expand a service that helps people depending on fixed income like social security manage finances and pay for housing.
William Ellis, a Republican and an Ellettsville town councilmember, said the town was unable to give raises to its employees due to a budget shortfall, and in the future Ellettsville may shift to a “longevity system of rewarding people” rather than standard increases each year.
“When it comes to SB1, I’ve said it’s the worst of both worlds,” Ellis said. “I don’t think very many residents are going to see tax savings from this, but what they have seen is unable to increase any services of parks and anything.”
In closing, host Steve Brewer said he hoped the town hall would inspire a greater awareness of the challenges faced by local governments and organizations and encouraged viewers to vote.
“It’s up to us to support candidates who will listen to local voices,” he said. “It is the decisions of state and federal officials that frustrate our best efforts to solve the problems that beg for attention.”
