LaPorte County hears draft financial plan as SCA 1 and 2028 tax changes loom

Jason Simler, a consultant with Baker Tilly, presented a draft comprehensive financial plan to LaPorte County commissioners on Aug. 25 as the county prepares its 2026 budget and models the longer-term effects of recent state tax changes.

Simler said the draft is intended as a working document to guide budgeting over 2026–28 and to let commissioners compare actual revenues and expenses with the report’s estimates. “So tonight is just kinda present the first draft, for you to look at as you’re working through your budget,” Simler said, calling the presentation a starting point for discussion and revisions.

Why it matters: State legislative changes identified in the presentation (referred to in the draft as SCA 1) introduce additional deductions and exemptions that could shrink the county’s property-tax base and raise circuit-breaker losses. Simler warned the council that those changes — combined with options to shift more revenue to local income tax (LIT) starting in 2028 — could require the county to adopt new rates, reallocate fund balances and plan for cash‑flow and reserve impacts.

Key projections and choices

- Combined certified shares, public-safety LIT and EDIT (the county’s existing local income tax buckets) are estimated at about $23 million for 2026 based on recent DLGF figures (certified shares ≈ $6.3M; public safety ≈ $8.8M; EDIT ≈ $7.9M). Simler showed the estimate on the draft’s revenue schedule and said the figure informed the 2026 baseline. “So that’s kind of in line as we think about the economy,” he said.

- Circuit-breaker losses: the draft projects circuit-breaker losses of roughly 13–14% in 2025–26, rising to about 16% in 2027 as SCA 1 deductions ramp up. Simler described the circuit-breaker figure as the amount of levy “that you’re not collecting because of those credits.”

- Local income tax restructuring in 2028: Simler explained that current separate LIT buckets (certified shares, EDIT, public safety) will consolidate under the new structure; counties can adopt a county portion up to 1.2%. Baker Tilly modeled a county adoption of 0.7% in 2028 as an illustrative bridge that would generate about $22.8M, a number close to current collections under the existing structure.

- Rate mechanics and allocations: Simler clarified the mechanics for overlapping units: smaller towns (under statutory population thresholds) would be blanket‑allocated by population, whereas larger cities (for example, Michigan City) could set independent rates. He also noted some optional LIT components (jail, EMS, judicial, acute hospital) can be added and that total allowable rates across components can exceed current county rates.

Reserve health, cash flow and fund choices

Simler reported the county’s general fund balance at about $13.8M at the end of 2024 (an operating balance percentage near 26%), and he urged caution. “25% is pretty healthy, but you can see here we’re kinda going down for next couple years,” he said, adding that property-tax reductions and a shift toward more volatile local income tax revenue argue for larger reserves.

He also noted timing and cash-flow issues: the apparent strength of year‑start balances reflects large tax draws in November–December, and commissioners cautioned that the county can experience months with constrained spendable cash.

Specific fund notes

- EDIT/CCD: Simler pointed to the county’s EDIT balance and a potential option to increase a small EDIT rate (example on page 9 showed a potential additional ~3¢ generating roughly $1.3M after circuit breaker impacts). He said the county must consider whether to use EDIT/CCD for capital projects or to move certain charges (software, computers, related salaries) into that fund, and he warned it was too late to adopt that change for 2026.

- Health fund: the draft assumes LaPorte County will discontinue participation in Health First Indiana for 2026 modeling purposes, which reduces state fund revenue; commissioners asked staff for comparison numbers and noted the change is still “in progress.”

- Motor Vehicle Highway (MVH): Simler flagged projections showing MVH balances drifting negative in later years under current assumptions and recommended addressing that in the 2027 budget cycle.

Unanswered questions and next steps

Commissioners were asked to review the draft and route specific budget questions and departmental numbers through county staff (Mike and Joey) so Baker Tilly can update the model. The auditor’s office proposed a follow-up budget workshop on Sept. 11 to continue the discussion and confirm room availability.

Jason Simler closed by reiterating the draft’s flexibility and the team’s readiness to incorporate commissioner feedback. The workshop recessed for a short break and planned to reconvene for the regular council meeting.

Attribution: Quotes and figures in this article come from Jason Simler, Baker Tilly, and exchanges with unnamed council participants during the Aug. 25 LaPorte County budget workshop.