The Bloomington Parks and Recreation Department is planning financial adjustments in response to a projected $11.2 million general fund deficit due to state legislation.
A five-year plan released Sept. 2 stated “the Department may no longer assume stable local tax revenue or easy access to capital project financing,” because of Senate Enrolled Act 1 implications.
SEA 1, enacted in April 2025, reforms property and local government finance. It reduces how much homeowners pay for property taxes, alters local income tax structures and places new constraints on short-term bonds and debt issuance.
In the proposed 2027 city budget introduction, Mayor Kerry Thomson said SEA 1 “will impact the City of Bloomington’s budget deeply by 2029.”
In an email to the Indiana Daily Student, Bloomington Communications Director Desiree DeMolina wrote the city “is taking a balanced operational approach focused on maintaining high-quality core services, protecting existing assets and employees,” without adding any programs or full-time equivalent workforces.
“The proposed budget also maintains strong reserve levels and makes targeted capital investments through general obligation bonds.” DeMolina wrote.
The city’s 2027 budget proposal, released in August, projects a deficit of $5.47 million in next year’s general fund, which is the city’s primary operating account. This includes $63.7 million in proposed expenditures against $58.2 million in estimated revenues, according to a memo from Bloomington Controller Geoff McKim.
The $11.2 million figure over the next five years was based from the 2026 proposed budget and citywide projections in the general fund gap when the parks master plan was created.
But according to the 2027 budget proposal, the general fund gap projections decreased to $9.48 million by the time the 2026 budget was formally adopted in October 2025 and narrowed further in the 2027 proposal to $5.47 million for the 2027 fiscal year.
One contributing reason for the decrease is the expiration of a cap that had limited annual property tax revenue growth to 4% since 2023. Now the cap for 2027 is 6%, letting the city collect an increase of about $2.3 million in additional property tax revenue in 2027.
The state also reported a countywide growth of 5.38% in property taxes, which estimated local income tax revenues for 2027 are based on.
The city’s 2027 budget proposal requests no new full-time positions or programs across city government. Several functions previously supported by the general fund —like the controller’s office, human resources and parts of the police and fire departments — were shifted to other funds starting in 2026.
What does this mean for Bloomington’s parks?
The Bloomington Parks and Recreation Department’s 2025 facility assessments found about $2.4 million in needed repairs at the Bryan Park Pool and Mills Pool over the next decade, including replacement pool liners, mechanical systems and roofing.
The department also flagged the ammonia refrigeration system at the Frank Southern Ice Arena as a safety and regulatory risk that may require replacing or redeveloping the facility, among other issues.
SEA 1 restricts the city’s ability to issue short-term general obligation bonds — a government-issued loan repaid within a few years using tax revenues.
In the 2027 budget proposal, the city says it plans to issue two six-year general obligation bonds every three years, one for the Parks District and one for the Civil City. Bloomington Parks and Recreation will receive the bonds for the Parks District, a debt structure legally separate from the rest of city government.
According to the proposal, the 2027 Parks District general obligation bond, worth approximately $6.7 million, will “consist of several high-priority maintenance and improvement projects from the Parks Master Plan.” This includes repairs to aquatics facilities and upgrades at Winslow Sports Park and Frank Southern Center.
The current local income tax structure, which finances the general fund, the public safety local income tax fund, the economic development local income tax fund and more, expires at the start of budget year 2029 and will be replaced by a new system in 2029.
New rates must be adopted before October 2028 to take effect for the next budget year.
What's to come
Under the new income tax structure, tax rates for county government, fire and emergency medical services, the library and Bloomington Transit will be “more dependent on the decisions made at the County level” and could “have a profound impact on the City budget,” according to the 2027 budget proposal.
This restructuring does not apply to the Parks and Recreation Operating Fund, which is funded separately through a dedicated property tax levy.
Both the mayor’s office and the controller’s memo point to 2029 as the year SEA 1’s full impact on the city will take effect, as the local income tax structures change from 2028 to 2029.
A Bloomington City Council public hearing for the budget proposal is scheduled for 6:30 p.m. Sept. 23, with final budget adoption from the council scheduled for 6:30 p.m. Oct. 7.
