Goshen officials outline budget shortfall tied to Senate Bill 1; estimate $800,000 loss next year

GOSHEN — City officials told the Goshen Common Council at a Sept. 12 work session that preliminary state and local analyses indicate the city could face roughly an $800,000 net budget shortfall in 2026 tied to changes in state law, with a larger revenue shock possible by 2028.

Mayor (name not specified) summarized two charts produced during the bill process by the Legislative Services Agency: one showing projected net revenue and the other showing year-over-year revenue changes. "We, we have about a $10,000,000 less budget this year than we did the previous year," the mayor told the council, and later said, "it would be roughly an $800,000 loss for the city next year." Those figures reflect the city’s view that limits in the state law slow revenue growth even as costs continue to climb.

The council heard that the two charts measure different things: one shows net revenue after rising costs, and the other shows the revenue side alone. The mayor said some state legislators have pointed to the revenue-side chart to argue that city revenues will still rise year-to-year, but she cautioned that that perspective does not account for higher operating costs and the city’s shrinking net. She also said the Legislative Services Agency’s figures did not include an anticipated loss in income tax receipts tied to expiring local income-tax lids; city staff estimate that the combined effect could be substantially larger by 2028.

City staff described the estimates as preliminary. "These are both preliminary estimates that were provided, and we are told that they won't have a comprehensive financial analysis for us until July," the mayor said. Councilors were told the administration will file the required Form 3 notice to the public and that the administration will submit an introduction budget and hold a public hearing in 10 days.

Officials also described how some line items in the city’s submitted figures are placeholders and that a more detailed budget packet will be provided at the first public hearing. Staff noted the city has been using cash reserves in some funds and that certain funds remain balanced while others will be drawn down. One councilor observed that after removing Tax Increment Financing (TIF) items, the submitted budget appears to be slightly higher than the previous year in some measures; staff confirmed some funds are balanced while others will continue to draw reserves.

The administration outlined next steps: provide the detailed budgets to the council by the next calendar meeting, continue reviewing potential revenue measures and expense reductions, and await the comprehensive state analysis. No formal vote was taken on budget adoption at the work session.

Ending — The council set a schedule to publish the introduction budget and hold the required public hearing within 10 days of the meeting; staff said they will provide the more detailed fund-by-fund materials in advance of that hearing so councilors and the public can review specific proposals and placeholder amounts.