Mayor Sue Finkham said Carmel faces a multi-year revenue shortfall under Indiana's Senate Enrolled Act 1 and that city leaders must prepare for spending reductions and new revenue options.

"Wee got to put our hats on and try to find deeper cuts and other ways to increase revenue to offset this gap," Mayor Sue Finkham said during the livestreamed event hosted by Carmel Clay Schools and the City of Carmel. She warned the law will phase in through 2031 and substantially reduce property-tax revenue while limiting levy growth and removing excess-levy appeals.

The law reduces property taxes for homeowners who qualify for homestead deductions and raises the business personal property exemption, Finkham said. It also creates a process allowing communities with more than 3,500 residents to implement a citywide local income tax of up to 1.2 percent beginning in 2028; she noted counties can see different maximums under the new rules. Those changes mean the citys two largest revenue sourcesproperty taxes and local income taxeswill shift over the coming years.

Finkham walked listeners through city projections showing property-tax revenues rising modestly through 2025 and then falling as SEA 1 phases in. She said the city must bridge a projected gap between prior revenue expectations and the lower post-SEA 1 outlook, citing rising labor and materials costs that will not slow because of the law.

Public safety, infrastructure and parks were identified as priorities the administration intends to protect while balancing a constrained budget. Finkham said Carmel plans to proceed with the budget process beginning Sept. 8 with a public presentation to city council and additional collaborative meetings afterward.

Finkham highlighted several service and capital needs that could be affected by tighter revenues: a seventh fire station with 14 firefighters and new apparatus for the city's growing west side; funding and maintenance for parks and roughly 30 city buildings with unassessed capital needs; and ongoing investment in training and safety programs for city employees.

She also described steps the administration is taking to respond: advocating state lawmakers to reconsider SEA 1 provisions for growing communities, pursuing operational efficiencies begun in 2024, maintaining a transparency portal for budget data (bit.ly/carmelPortal) and continuing to pursue high-quality development to support city services.

Finkham cautioned the state legislature may revisit or further modify SEA 1 and urged residents to track budget updates and the upcoming council schedule online. She did not announce any formal city tax change or specific personnel reductions at the town hall.

"We have to find new ways of doing business, new ways of getting the work done, new ways to serve our community to come under that blue line with that orange line," Finkham said, summarizing the fiscal challenge facing the city.