Henry County Council met in a 2026 budget-preparation session and moved toward a set of changes that commissioners said should balance the general fund while preserving reserves.

Shannon, a staff member who prepared the spreadsheet analysis, told commissioners that if the council keeps $1,725,000 in the jail local income tax (jail LIT) the projected balance would be $2,900,000 and that moving specified sheriff positions would free roughly $619,291 in general-fund salary expense plus about $73,000 for Medicare and Social Security. "If we keep the 1,725,000 in jail lit, the projected balance is $2,900,000," Shannon said during the discussion.

The council’s discussion focused on three priorities: how much of the jail LIT reserve to use for ongoing operations (including wages), whether to shift several jail-related payroll lines out of the general fund, and how to fund countywide employee salary increases. Commissioners also agreed to raise certain jail and inmate-related budget lines and to retain a $400,000 placeholder for EMS in the general fund pending contract negotiations.

Why it matters: the session set the outlines of the county’s recommended 2026 appropriation and will change the composition of reserves across funds. Commissioners said they want to provide raises to county employees while avoiding an immediate property-tax increase, but several members warned that recurring wage shifts into LIT could deplete that fund and require future levy adjustments.

Most important decisions and numbers

- Raises: Commissioners reached a working consensus to budget employee raises at 100% of midpoint based on the Wagner and Shealy compensation study, with the increase to be effective Jan. 1. Shannon estimated the total impact at roughly a half-million dollars to the general fund (the analysis also showed additional, smaller impacts to other funds such as public safety, highway, parks and health). Commissioners asked staff to produce a black-and-white summary of the final numbers before the public hearing.

- Jail LIT and payroll shifts: The council approved by straw poll (4–3) a plan to move a set of sheriff’s positions and related payroll costs from the general fund into the jail LIT, while leaving the control-room attendants budgeted in the general fund. Shannon’s worksheet estimated moving the jail commander, assistant commander, matron and assistant matron, clerks, cooks and other positions would free approximately $619,291 in base salary from the general fund and about $73,000 in FICA/Medicare costs that had been budgeted in commissioners’ salary lines.

- Reserves and risk: Commissioners reviewed bond paperwork and Baker Tilly’s recommendation. Staff reported there is no bond covenant requiring a specific LIT reserve, but Baker Tilly advises keeping one year of bond payment in reserve. Commissioners discussed a range of reserve targets cited in staff correspondence—roughly $850,000 to $2,500,000—and several members favored a conservative, hybrid approach (using part of the jail LIT to fund raises while leaving a multi‑month bond-payment buffer).

Other budget adjustments discussed or agreed

- Inmate medical: Commissioners agreed to increase the inmate medical line by $100,000 (from $650,000 to $750,000) based on tracking and contractual expectations.

- Secure beds: The council agreed to increase the secure-beds line from $150,000 to $250,000.

- EMS funding: The council left $400,000 in the general fund budget as a placeholder for EMS-related contract support (the staff said Newcastle, Shirley and Middletown proposals are in negotiation and that $290,000 was the number proposed by the City of Newcastle). Commissioners said they expect to pay from reserves rather than raising the county’s income tax to cover this line in 2026.

- Certified shares and supplements: Commissioners reviewed updated certified-share estimates from the Department of Local Government Finance (DLGF) that were materially higher than the consultant’s (Baker Tilly) estimates. Staff recommended conservative assumptions for supplemental distributions; some commissioners urged not to budget supplements because DLGF issues a memo advising against it.

Mental health funding and conflict disclosure

- The council noted statutory funding obligations for the county’s mental-health provider. Debbie, a county staffer, told the group the required payment will be roughly $19,000 higher than previously budgeted and she will include the increase. Commissioner Jay (who said he serves on the Meridian Health board) announced he would abstain from further discussion on that line.

Next steps and schedule

- Staff (Debbie and Shannon) will produce an updated, line‑by‑line budget reflecting the agreed changes and the raises at 100% of midpoint.

- The council scheduled a follow-up budget review session for Aug. 26 at 10 a.m. to review the revised numbers in black and white and to finalize decisions before the public hearing and adoption process (the public hearing was referenced for Sept. 10). Debbie warned that the proposed reassignments will require additional appropriations and cannot be adopted as-is without those adjustments.

What commissioners emphasized

Commissioners who supported moving payroll to jail LIT and approving 100% midpoint pay increases argued the county’s conservative revenue assumptions and strong reserves made the adjustments affordable now. Other commissioners warned that shifting recurring personnel costs into the LIT is a recurring obligation that could deplete the fund over several years and might require future tax or levy changes.

Ending

Staff will circulate a revised budget prior to the Aug. 26 work session. Commissioners asked for the final tallies of the general-fund and LIT impacts in writing so they could review changes before the advertised public hearing schedule.