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County consultant warns of eroding general fund, urges early budget review and revenue options
Summary
A Jan. 13 briefing from the county's financial consultant flagged falling fund balances driven by rising health‑insurance and other costs and urged Tippecanoe County leaders to convene department heads, consider revenue options and start budget work early to avoid a projected drop to roughly $12 million in the general fund in 2026 if no action is taken.
Tippecanoe County's financial consultant told the County Council and Board of Commissioners on Jan. 13 that the county's multi-year spending trend and recent cost pressures have reduced its cushion and require immediate attention. "It's going to be a fun year," consultant Greg said at the start of a wide-ranging sustainability briefing, then outlined how expenditures rose from about $56 million in 2022 to the high‑60 millions more recently while revenues did not keep pace.
Greg said the county ended 2025 with a general fund balance of about $18.7 million — below earlier projections — and warned that, without changes, that balance could fall to roughly $12 million in 2026. He and county Auditor Jennifer, who provided the packet figures, identified two principal drivers: higher health‑insurance claims and lower-than‑expected revenue growth, including circuit‑breaker impacts on property tax receipts and pressure on interest income as rates decline.
"Expenses outstripped revenues in 2025," Greg said, pointing to health‑care cost spikes, supplemental adjustments and a $3 million transfer into the county's self‑insurance fund. Auditor Jennifer explained the county used updated collection and spend-rate assumptions (97% property‑tax realization and 96% budget spend) and noted the county converted its financial system to Oracle NetSuite, which affected reporting detail.
Council members asked for concrete next steps. Greg urged a two‑pronged approach: departments should identify expense savings while the county explores revenue options. He specifically mentioned a previously discussed correctional‑facility local option income tax (0.10 percentage point; an estimate in briefing materials suggested it could yield roughly $6.2 million) as one revenue path, and recommended the county begin department‑level budget workshops in February rather than waiting until the traditional summer budget cycle.
Several council members supported early department head engagement and vowed to work with the commissioners to align expectations. "We need all hands on deck from the department heads," Greg said, urging monthly checkpoints and a revised sustainability projection once final 2025 figures are reconciled.
The consultant also noted state‑level changes that could further tighten local revenue — including proposed amendments to the county income‑tax framework in the current legislative session — and encouraged the council to prepare multiple scenarios.
The council agreed to update the sustainability report, convene department heads for targeted budget discussions and bring suggested revenue and expense changes back to the board ahead of the summer budget cycle.
