County adviser warns Senate Bill 1 will reshape local income-tax options, affect juvenile facility financing

An independent financial adviser told the Tippecanoe County Council that Indiana’s Senate Bill 1 and related changes at the Department of Local Government Finance will force the county to choose new local income-tax (LIT) rates and rework capital and operating plans if it wants to preserve revenue for operations and projects such as a proposed juvenile detention center.

Greg, an independent financial adviser and certified public accountant who presented the analysis, said the new law eliminates many existing local income-tax buckets in 2028 and replaces them with a single maximum county LIT of 1.2%. “Senate Bill 1 is throwing some curves at us,” he said, and the county must give rating agencies and bond investors a clear multi-year revenue pathway if it plans to use income taxes to finance major capital projects.

The presentation laid out the mechanics and timing the council must consider. Greg said a countywide LIT rate will take effect for tax collection in January 2028 if the county and affected units complete required actions in 2027. He told the council it should begin budgeting and negotiating rates in January–February 2027 and finish required approvals by July 2027 so new collections can begin in 2028; he also referenced an August 1 notification deadline for other taxing units and a statutory approval window ending Oct. 1 for some procedural steps.

Why it matters: the adviser’s packet projects that a full 1.2% county LIT at current income levels would generate roughly $70 million a year for Tippecanoe County, but that number would be shared among multiple units…