Local mayors say recent changes to Indiana tax law could create long-term challenges for cities and towns, especially when it comes to funding basic services.

Vincennes Mayo Joe Yochum says legislation passed by the Indiana General Assembly in 2025 — Senate Enrolled Act 1 — was promoted as providing about 300 dollars in property tax relief for homeowners. But he says the law is reducing revenue cities rely on to operate. Yochum says Vincennes expects to lose about 1.3 million dollars per year due to income tax restructuring, even before accounting for additional losses tied to lower property tax collections.

Yochum says with most city departments already operating with reduced staffing levels, there are few traditional budget cuts available. As a result, he says the city is reviewing utility-related options, including possible increases to water and sewer rates, as a way to help make up the difference. He says no final decisions have been made, but discussions are underway.

Bicknell Mayor Thomas Estabrook says the impact of Senate Enrolled Act 1 is especially concerning for smaller communities like Bicknell, which have fewer resources and less flexibility when revenue declines. He says towns with limited budgets often have little overhead or staffing to cut without affecting essential services.

Estabrook says reduced revenue forces local leaders into difficult decisions, particularly when funding drops but service demands remain the same. He says communities like Bicknell must carefully examine budgets and priorities as they prepare for the future.

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