Consultant outlines Indiana budget basics, revenue mix and planning steps at Danville work study

Susan Cowell, a budget consultant with Taggart Tilly, told Danville officials at a work-study session that Indiana law requires every taxing unit that receives property tax to prepare an annual budget for local review and for the Department of Local Government Finance (DLGF) to review and certify. "Our constitution, Indiana state law, requires that every unit that receives property tax in the state prepare a budget for first local review and then for review by the Department of Local Government Finance," Cowell said.

Cowell walked the group through the budget cycle and key inputs: counties generally certify net assessed values (NAV) around Aug. 1, local units develop budgets from July through October, the DLGF issues preliminary determinations between November and mid-January, and tax bills are computed after levies are certified. She emphasized NAV’s role in determining tax rates and said the town is operating under a 4% maximum levy growth for the current cycle (the consultant noted the figure would have been about 5.5% without last year’s statutory cap).

Using Danville’s 2023 totals, Cowell showed the town’s revenue composition and practical examples. She said property taxes accounted for roughly 22% of Danville’s total receipts in 2023, local income tax about 18%, and licenses/permits and charges for services about 21%. Cowell gave example tax rates for two local taxing districts: Danville Tax District 003 had a 2024 rate of 2.2046 per $100 of assessed value, while Danville Washington 033 had a rate of 2.6204 per $100—explaining that residents in the same town can receive different total tax bills because of overlapping district levies.

Cowell reviewed circuit-breaker credits and caps that reduce collections at the parcel level: the 1% cap applies to primary homesteads (after applicable credits), 2% applies to other residential property, and 3% to commercial/industrial classifications. She explained how circuit-breaker losses are calculated at the district level and then allocated among taxing units in proportion to their share of the district rate, and that debt-service levies are treated differently so those payments remain covered by other fund adjustments.

On budgeting practice, Cowell recommended preparing sustainable operating budgets and developing a multiyear capital and financial plan to avoid relying on reserves for recurring costs. She urged working with department heads to prioritize needs, consider options for one-time versus recurring expenditures, and use the state Gateway site for appropriation submissions when additional appropriations are needed. Cowell also noted some revenue supplements (for example, supplemental LIT distributions) are not guaranteed and are determined later in the fiscal cycle.

The meeting concluded with an Unidentified Speaker making a motion to adjourn the work study. The transcript records the motion and a response but does not record a formal vote or outcome.