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County leaders say SB1 will sharply limit revenue growth, complicating 2026 budget
Summary
Vanderburgh County officials told the Personnel/Finance Committee that state Senate Bill 1 (SB1) will sharply reduce expected revenue growth for 2026, leaving the county with multimillion-dollar contract escalation obligations that may be unfunded.
Vanderburgh County President Schettler told the Personnel/Finance Committee that Senate Bill 1 will reduce the county’s available revenue growth for 2026 to roughly $760,000, far below the amounts the county had planned to cover upcoming contractual obligations.
“It's in that $7.63 range,” Schettler said, describing the county’s estimated allowable increase under SB1 and adding, “that's what it amounts to.”
The county’s leadership, Schettler said, met with a state representative, the county auditor and the county treasurer to assess the impact. He told the committee that upcoming contract escalations — covering labor, IT, property management and county facilities including the youth detention center and other service contracts — total “a little bit beyond $5,000,000” of new obligations. With SB1’s limits on revenue growth, Schettler said the county would not be able to fund those escalations without additional revenue or cuts.
Council members flagged the county’s planned capital and staffing needs as areas of potential conflict with the new revenue limits. One council member noted that a planned jail expansion will require additional personnel and debt service and urged caution: “we just need to be really cautious how we spend funds, you know, going forward for the next few years.”
Committee members asked whether the state legislature might reopen or amend SB1; Schettler said he did not know and that the council may need to revisit assumptions “sometime soon in the summer.” Several members suggested delaying discretionary hires and nonessential spending until the county has clearer guidance on state action and the Division of Local Government Finance’s interpretation.
The discussion framed later votes in the meeting. Multiple committee motions to table or delay personnel and classification requests referenced the revenue constraint and the need for clarity on how SB1 will be implemented and how state pass-through grants might be affected.
County officials said they will continue to monitor guidance from the state and to work with the county auditor and treasurer as the budget season approaches.
