Mayor presents condensed 2026 budget; warns of revenue shifts from tax changes and rising health-care costs

Mayor (identified in meeting materials) presented a condensed version of the proposed 2026 city budget at the Michigan City Common Council session on Sept. 16, summarizing revenue projections, departmental changes and planned expenditures.

Key points the mayor and City Controller Mary Limwell described included a proposed 2% across-the-board pay increase, salary-range standardization for all employees, and a planned riverboat transfer to the general fund budgeted at $4.3 million but to be used only as needed. The budget also includes reclassifying some full-time roles to part-time on attrition to control costs, parity pay ranges for CDL drivers across departments and consolidated seasonal pay ranges.

The mayor told council members the city will begin to receive monthly payments next August under House Enrolled Act 1448 that will total $8.2 million over a little more than four years; those payments were not included in the 2026 base budget. The mayor emphasized long-term revenue risk: “The lit tax is gonna be going away in 2028,” and the city faces a potential revenue gap tied to the shift in how local revenue is calculated.

City Controller Mary Limwell walked the council through the budget-adoption timetable: first reading (introduction) on Sept. 16, public hearing at the next meeting (advertised per statute), council review and opportunity to reduce or amend the budget, and third reading for final approval. She also noted the need to maintain cash balances and Baker Tilly’s assistance with financial forecasting.

The mayor warned of rising health-care costs for the city workforce: the budget’s health-care line was increased from an assumed $21,000 per employee in 2025 to $23,000 per employee for 2026, with year-to-date costs already showing a multi-hundred-thousand-dollar increase. The administration also described targeted capital purchases (trucks, mowers, CNG truck match obligations) and said the refuse fund will absorb part of the match for a CNG truck because grant balances and increased vehicle prices left a local share.

Why it matters: The budget frames the city’s financial decisions for 2026 and outlines choices that could affect services, staffing and use of one-time riverboat transfers. The mayor and controller framed the package as “pretty flat” compared with the prior year, but warned of structural shifts in revenue sources through 2028 and higher operating costs.

What’s next: The budget will be advertised as required by statute and will return to council for a public hearing and subsequent readings; councilmembers may propose amendments during that process.