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Evansville mayor frames 2026 budget around SB 1 shortfall; proposes reserves, spending cuts
Summary
Mayor presented a $140.2 million 2026 general fund proposal and outlined three strategies to cover a projected $4.1 million hit from Indiana’s SB 1: limited use of casino reserves, expense reductions and efficiency measures, and pursuing future revenue. The proposal pauses some capital projects and does not include a municipal income tax increase.
Mayor (Mayor, City of Evansville) on Tuesday outlined a proposed 2026 general fund budget of $140,200,000 and warned that state legislation known as Senate Enrolled Act 1 (SB 1) will reduce city property-tax revenue. The mayor said Evansville is likely to lose about $4,100,000 from the general fund next year and detailed a three-part response: ‘‘smart use of our reserves,’’ cost-saving measures and innovations to grow revenue.
The mayor said the proposed budget is a 1.6% increase over the current year and reflects priorities collected from residents: roads, public safety, housing, parks and updated technology. ‘‘By reviewing and approving the city budget, you play a vital role in ensuring that we allocate resources responsibly and in accordance with our city values,’’ the mayor said.
On the revenue shortfall the mayor explained the state options and local choices the bill leaves to municipalities and emphasized that the proposal does not include a new municipal income tax. The mayor said the city will use a mix of general fund reserves and a planned interfund transfer from casino funds as temporary protection for essential services. Controller Robert Gunter reinforced that the budget includes a $10.6 million interfund transfer from the casino fund as a backup: ‘‘We're not going to take it unless we absolutely need it,’’ Gunter said.
To reduce pressure on operations, the proposed 2026 budget pares back capital spending by $19,000,000 and pauses several projects and vehicle purchases, the mayor said, specifically naming projects such as zoo facility improvements and Virginia Street reconstruction as postponed. The mayor also said departments will pause new position requests and manage about 118 current vacancies strategically to limit hiring costs while still meeting service needs.
The mayor listed specific investments that remain in the package: $1,000,000 for the Affordable Housing Trust Fund, a $4,500,000 paving and road safety allocation (a $1,000,000 increase), cybersecurity and digital protection spending, and $900,000 to maintain the METS Micro transit service. The mayor described use of casino reserves as a temporary measure and said the city will press the state to revisit SB 1.
The presentation included an explicit statement about fiscal trade-offs. The mayor said: ‘‘This is a temporary strategy, not one we intend to rely on year after year.’’ Gunter told council members the casino transfer would be pulled and approved on an as‑needed basis under finance ordinance procedures.
Council members and staff discussed the budget materials and the financial assumptions, including vacancy savings and the use of interfund transfers. The administration said additional details and line‑item clarifications will be provided before the ordinance advance and public hearings.
