More What Kind of Morons Run Indiana?

 I do not see any reason for adding much commentary to Matt Greller's op/ed piece in the Indiana Capital Chronicle, Income tax repairs would give Indiana cities and towns a better chance at success under new system.  If you can read, you will understand why I lapped my title on this post.

As local governments move through their first full budget cycles under Senate Enrolled Act 1, a clear trend is emerging: the law significantly restricts long-term revenue growth at the very moment cities and towns are confronting rapidly rising costs. When revenue growth is compressed and fiscal uncertainty increases, the outcome is predictable — major cuts to local services.

Because employees account for the largest share of municipal budgets, hiring freezes and the anticipated elimination of positions have been the most common responses so far. But personnel decisions are only part of the story. New public safety buildings and equipment are being shelved, neighborhood sidewalk programs are being canceled, community amenities that were expected to open in 2026 are now on hold, and some communities can no longer afford to match Community Crossings grants needed to upgrade failing infrastructure.

If SEA 1 is not adjusted, what does the next decade look like on the ground?

It looks like delayed or canceled police and fire stations, and departments that can’t field enough personnel to meet call volumes. It looks like increased response times when seconds matter.

It looks like streets and roads going longer between repaving, and recent projects deteriorating faster because basic maintenance has been pushed off.

It looks like shuttered pools, reduced hours at parks and community centers, fewer programs for kids and seniors, and less support—both financial and in-kind—for the parades, festivals, and local events that define small-town Indiana and city neighborhoods alike.

***

These fiscal pressures are not confined to a single city or one part of Indiana. Under SEA 1, local leaders are wrestling with:

• A lack of reliable state revenue projections for 2026, 2027, and 2028 income tax revenues, which makes responsible long-range budgeting far more difficult.
• A new annual adoption process for the income tax that introduces instability, particularly for communities under 3,500 residents that must petition their counties each year for distributions.
• Technical complications with debt coverage and TIF neutralization that put infrastructure and economic development projects at risk.

To be clear, local leaders are not opposed to tax reform. They are asking for balance. Communities across the state are already stretched thin as they work to meet residents’ expectations and maintain the amenities that attract new residents and businesses. Any tax reform must be crafted in a way that supports — rather than undermines — the fiscal health of municipalities. If state and local leaders approach the 2026 session with that shared understanding, it can be productive for everyone.

***

In November, Aim is convening regional roundtables — including in Mishawaka and nine other communities — to hear in detail how SEA 1 is affecting local budgets and services on the ground. Based on what we are already hearing from our members, Aim has prepared a package of technical fixes to SEA 1: improvements to the annual adoption and distribution process; clearer and more dependable revenue projections; adjustments to rate splits so municipalities are not structurally disadvantaged; greater fiscal certainty for small communities; and corrections to debt-coverage and TIF provisions so local infrastructure and economic development tools continue to function as intended.

At the same time, we took seriously the message from lawmakers in 2025 that local government must continue to modernize and pursue efficiencies. Alongside our SEA 1 proposals, Aim is advancing a series of modernization and efficiency ideas to help local governments operate at an even more effective level. A key priority is updating the state’s government modernization statute to make it easier and more flexible for units to restructure, share services, and collaborate where it benefits taxpayers. We are also exploring streamlined service-delivery approaches and better use of technology and data so communities can stretch every dollar as far as possible.

These problems affect Republicans as well as Democrats - even if our cities lean more to Democrats. I assume they affect the towns and townships in the rural areas where Republicans hold sway.

Which raises two questions: 

What were the Republicans in our General Assembly thinking? 

What are Indiana Democrats going to do to fix the hold morons have on the General Assembly?

sch 11/10