Mayor (name not specified) told the Michigan City council at a Sept. 11 budget workshop that a recent state change commonly referenced as Senate Enrolled Act 1 will shift revenue from property-tax related sources to a local income tax model and substantially reduce some of the city’s current revenue streams.

The mayor said the change will eliminate several local income tax (LIT)/riverboat-style funds by 2028 and that Michigan City is likely to lose roughly $14,000,000 across three funds currently supported by those levies. “We’re basically getting rid of property taxes to an extent, and our money’s gonna be based on local income tax,” the mayor said. The mayor added that under the new structure the maximum municipal share available to the city together with county allocations will be 2.9 percent, lower than the roughly 3.7 percent the city currently receives from the combined levies.

The mayor framed the change as a structural shift: revenue historically tied to assessed property value will be replaced by revenue tied to residents’ earned income, which makes workforce and higher local wages central to future revenues. She said the city’s high share of non‑homeowner assessed value (about 40 percent in rentals/second homes) leaves Michigan City more exposed than neighboring cities; the mayor noted La Porte has a larger homeowner share and would fare better under the new law.

Council members asked for clarification about which LIT funds will end and the scale of the loss; the mayor said two funds were shown on her presentation and that a third fund exists but was not listed on that slide. When pressed on totals she said the cumulative loss is about $14 million and reiterated that the city’s current combined effective rate is approximately 3.7 percent while the new maximum the city could collect under the replacement system is 2.9 percent.

The mayor said local policymakers and other mayors are “banding together to fight this” and that the administration will prepare for the change in the city’s multi‑year financial planning. She recommended studying options such as local occupancy, food-and-beverage or other tourism‑related levies that would require state-level authorization, and said the administration will ask Baker Tilly — the city’s budget advisor — to evaluate long-term impacts and recommend policy choices.

The presentation noted procedural next steps: the mayor’s budget presentation was Sept. 11, the first reading/public handout is scheduled for Sept. 16, department workshops are planned Sept. 24–25, a follow-up workshop Sept. 30, second reading/public hearing Oct. 7 and a third reading if necessary Oct. 21.

Why it matters: the shift changes who pays (workers vs. property owners), how much cities can collect, and how Michigan City must redesign revenue strategy going into 2028.

Details and context drawn from the Sept. 11 workshop: the mayor cited the state law by name and described projected percentage and dollar impacts; she said Michigan City will need more homeownership and more well‑paid jobs to sustain revenue under the replacement regime.

Ending: The mayor said the administration will return with analysis and options; council members asked for follow-up detail and the city scheduled additional budget meetings in September and October.