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Clinton County Council urges conservative 2026 budget approach and eyes $30,000 fiscal study as state tax rules change
Summary
Council members warned department heads to expect budget uncertainty for 2026 as recent state legislation remakes local government revenue; county plans a fiscal-impact study with Baker Tilly (proposed not-to-exceed $30,000) to model assessed-value and local income-tax scenarios before finalizing salary guidance.
Clinton County Council told department heads at its June meeting to prepare for an uncertain 2026 budget and described a proposed fiscal-impact study to quantify the effects of recent state tax legislation on county revenues and tax caps.
Council members said recent legislation passed by the state legislature will “completely remake the local government revenue landscape,” leaving the county unsure how assessed values, tax caps and new local income-tax tools will apply. To help the county plan, the council reported engaging Baker Tilly to run a three-part analysis — a high-level categorical review, a parcel-by-parcel assessment, and a local income tax analysis — with a proposed not-to-exceed fee of $30,000 ($25,000 for sections one and two; $5,000 for section three). The firm told the council it hopes to have software ready in July and a work output by August, ahead of budget hearings.
Council members said their immediate guidance to department heads is to approach 2026 conservatively and to avoid creating fixed expectations for raises until the county has better revenue forecasts. “The captain recommends you buckle your seat belt because there could be some budget turbulence,” one council speaker said. Another council member said, “I have no clue. My focus…is to protect what we've done in the last year,” and urged protecting recently adopted longevity pay and salary structures.
Department heads at the meeting asked for clarity on how to prepare budgets if no percentage guidance is provided. One department head (speaking for herself) said she would rather submit realistic requested increases but not create an expectation the council cannot meet; the council replied that budget forms are due July 15 and that the county intends to hold work sessions on pay policy before final adoption. Council members noted the phased timing for statutory changes: income-tax changes would begin in 2027 with fiscal effects on the 2028 budget, giving two budget cycles to smooth adjustments.
Council members also flagged employee benefits as a key budget unknown. The county’s current IU Health plan will phase out; the county previously rejected a single Anthem quote that showed a 49% increase on a roughly $2 million premium. The council said it expects renewal/pricing information to arrive in October and that the insurance committee will meet this month to review recent claims trends.
In a separate operational note, one county official said the county has been notified of a projected 70% increase in pharmaceutical costs from IU Health effective Jan. 1, 2026, and the council said it is exploring alternative partnerships and pricing for medications.
Next steps: the council expects Baker Tilly’s software in July and preliminary results in August, budgets to be submitted by July 15, and follow-up work sessions to refine pay-policy guidance for the 2026 budget.
