Madison County auditor warns of roughly $1.7 million shortfall; council weighs PSAP, levy shifts and election costs

Madison County Council members on Thursday heard from the county auditor that preliminary state revenue figures leave the county with a materially smaller revenue base for 2026 and that the county must find ways to reduce expenses or identify new revenue sources.

The auditor said the state’s certified local income tax (LIT) distributions and other revenue estimates reduce the county’s projected general‑fund receipts to about $44,000,001 for 2026, down from the budgeted amount near $45 million. “I got some good news and I got some really bad news,” the auditor told the council when presenting the figures, adding that the newest state report shows the county’s LIT certified shares at about $13,391,010.

The shortfall the auditor described — roughly $1.7 million between appropriations currently under consideration and conservative revenue estimates— prompted discussion of several options. Council members and staff focused on: (1) the public safety answering point (PSAP) local income tax, (2) reassigning portions of existing levies (such as park and recreation), and (3) using one‑time interest or rainy‑day monies for nonrecurring expenses.

On the PSAP option, the auditor explained that a county‑level 0.1% PSAP would raise an estimated $1,172,000 for the county’s share of central dispatch and could relieve pressure on the general fund depending on whether the rate is implemented on top of existing public‑safety rates or embedded within them. The auditor said, “If you passed a 0.1% PSAP, which is the maximum you can do, I think it would cover the budgets that we've been experiencing.” Council members noted that enacting the PSAP would involve legal and procedural steps and might require coordination with the county attorney; they directed staff to confirm the statutory mechanics and timing.

Property‑tax law changes (referred to during the meeting as SEA 1) were highlighted as a major source of uncertainty. Staff warned that several deduction and exemption changes in the new statute will reduce property‑tax collections going forward, and that the certified net assessed values (CNAV) and levy calculations are not yet final. The auditor said the council should assume a conservative 80% collection factor when modeling levy receipts for now, and stressed that some of the revenue shifts will not be correctable until the new local income tax framework becomes effective in 2028.

Council members also discussed a practical, near‑term obligation: election costs. The clerk’s office told the council that 2026 election expenses will increase compared with the current year and staff estimated adding roughly $290,000 to the clerk’s budget for the 2026 cycle. The auditor stressed those are unavoidable, one‑time (per election) costs that must be included if the council starts its budget from last year’s adopted figures.

Several council members proposed two parallel approaches: (1) compile a short list of unavoidable, mandated or contractual expenses to preserve (for example, court‑mandated salaries, election costs and certain public‑safety contracts), and (2) ask each department to identify one‑time capital items that could be financed from interest or rainy‑day funds instead of recurring salaries. Council President Green noted the importance of preserving essential services while avoiding use of volatile interest income for ongoing payroll.

The auditor and staff cautioned that miscellaneous special funds often have use restrictions and cannot be reallocated without ordinance or a formal process. Staff also noted that any transfers or reassignments of levy allocations (for example, reducing the park and recreation levy) will generate only modest cash because levies collect at less than face value once deductions and caps are applied. One staff estimate: zeroing out the park and recreation levy might free roughly $400,000 in cash — helpful but not sufficient on its own.

Council members asked staff to prepare two things for the next meeting: (1) confirmation from the county attorney on whether the council can enact a PSAP directly or whether commissioners’ approval is also required, and (2) a revised budget worksheet that starts from the 2025 adopted budget, adds unavoidable increases (election costs, mandated salary changes), and then shows targeted reductions or reassignments to get within projected 2026 revenues.

What’s next: staff will circulate the updated spreadsheets and legal guidance, and the council scheduled a follow‑up budget session for Thursday at 5 p.m. to consider adjustments and to decide whether to advertise a tentative budget. The auditor warned that, absent supplemental state revenue, the county likely must reduce planned recurring expenditures, delay nonessential capital projects or raise local revenues to close the gap.

Ending: Council President Green closed by reminding members that state law changes are shifting the local revenue landscape for the next two years and urged members to weigh short‑term fixes against long‑term stability for the county’s operations.