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Westfield briefing: SB1 projected to shave millions from operations; officials outline cuts and income‑tax options
Summary
Advisors told the Westfield City Council SB1/SCA1 could reduce operating revenue by millions between 2026–2028 and presented options including a 6% budget cut, rainy‑day increases and a possible local income tax (up to 1.2%) to replace lost county revenue.
Members of the Westfield administration and outside municipal advisors briefed city council members on how SB1/SCA1 will affect local revenue and what policy levers the council could use to respond.
Oscar, a municipal advisor from Bondri Consulting, said the city faces a rising gap in operating funds after levy‑appeal authority ends and listed estimated operating losses: “2.8 million is our expected loss in 2026, 7.1 million in 27 and 12.6 million in 2028.” He emphasized that those are day‑to‑day operational dollars rather than capital funding for roads or buildings.
The presentation explained that the state’s levy‑appeal mechanism — which had enabled Westfield to grow its operating levy and increase local income‑tax receipts — expires under SB1 and will limit annual levy growth to roughly 5–6% after 2028. Oscar and staff said that change reduces the city’s ability to expand revenues through levy appeals.
Mayor Mary Willis and advisors presented two near‑term strategies. First, the administration proposed a 6% reduction to the next budget, a hiring freeze for non‑public‑safety positions and adding funds to the rainy‑day reserve to “hunker down” while the legislature’s actions become clearer. “We are not going to overreact. We're not raising taxes,” Oscar said during the briefing.
Second, staff outlined the legal option to adopt a local income tax after county income tax authority changes. The analysis showed multiple scenarios: to maintain current certified shares the city would need roughly a 0.73% income‑tax rate; to replace the full projected loss the model showed a rate near 0.91% in one run. Presenters noted the statutory maximum the city could set is 1.2%.
Advisors also warned of debt and credit implications. The city holds three local income‑tax‑pledged (lit) bonds; advisors said those obligations are protected by prior law and the city would have to certify at least a 0.12% share to maintain debt service, or risk rating effects.
Council members asked for additional, parcel‑level detail and for a clearer multi‑year cash‑flow projection. Staff committed to providing a follow‑up memo with refined numbers, a breakdown of TIF impacts, and scenarios for combinations of levy, income‑tax and debt approaches. The briefing concluded with no formal action taken; staff said the council will consider decisions during the 2027 budget cycle if legislative changes do not delay the effective dates.
