JEFFERSONVILLE — Bedford Mayor Sam Craig will participate in a regional roundtable today at 2 p.m. convened by Accelerate Indiana Municipalities (Aim) to address the growing fiscal turmoil caused by Senate Enrolled Act 1 (SEA 1), the state’s new property tax relief law.
Mayor Craig will participate in a bipartisan coalition of Southeast Indiana officials who will gather at the Envision Center to discuss how the 2025 legislation is creating budget uncertainty and threatening essential public services in their respective communities.
The meeting comes as local governments across Indiana grapple with the law’s effects, which include changes to both property tax deductions and a significant overhaul of the regional income tax (LIT) structure set to fully phase in by 2028.
The Challenge of ‘Budgeting Blind’
According to officials, the complexity of SEA 1 has made the current budget-writing season especially difficult. The law, which reduces homeowner property tax bills, also reduces the total tax revenue available for local government operations, including salaries, services, and infrastructure.
A key concern expected to be raised is the lack of reliable revenue projections for 2026 budgets, leaving local leaders to essentially “budget blind” as they try to fund departments adequately.
Aim staff will present a package of proposed legislative fixes aimed not at repealing the law, but at making targeted amendments to ensure it is workable for cities and towns. The proposed solution will focus on:
- Improving the process for the new annual LIT adoption, which creates instability for long-term planning.
- Adjusting rate splits that currently favor counties over municipalities.
- Addressing the significant challenges facing smaller towns (under 3,500 residents).
The municipal advocacy group is specifically requesting changes that would reduce the income tax rate for county governments and increase the rate for municipalities, as well as remove the requirement for cities and towns to approve income tax rates annually.
Mayor Craig’s presence at the roundtable will underscore the widespread concern among Indiana’s municipal leaders that, unless SEA 1 is modified, communities risk significant cuts, including the shelving of infrastructure projects, reduced hours at community centers, and potential service delays.
