The Porter County Council approved $11 million for the 2026 General Fund Tuesday evening at the first of three budget hearings. The budget thus far represents about a quarter of the total line items.
The ‘26 General Fund projected budget is $53 million, including 10% in overages, while the non-General Fund budget is projected for $2.5 million with no overages. “Non-General Fund, either you have the cash or you don’t,” explained Deputy Auditor Ryan Kubal of those categories often referred to as “funny funds.”
For comparison, the 2025 General Fund budget is $49 million. It was one of a slew of statistics put together by the auditor’s office and laminated on a double-sided legal sheet for the council’s reference. Eight departments make up the bulk of the General Fund requests, with the sheriff, jail, and holding federal prisoners at the jail making up the top three.
The council has many parts to consider as it forms next year’s budget and looks to the next three years. The Porter County Foundation, which manages the proceeds from the sale of the hospital, oversees a current balance of $196 million and will decide whether to continue withdrawing the maximum allowed by the state of 5% of the interest on that balance, as it is doing this year, or revert to the 3.5% it has historically withdrawn.
The difference of nearly $3 million by going with the larger draw could help mitigate a projected property tax loss of $3.8 million for 2026. The county is also facing $400,000 in necessary IT upgrades, an ambulance contract up for renewal by the end of the year that is estimated to be about $2.1 million, a $10 million right-of-way program, and a $1.5 million Community Crossings Matching Grant match, the funding for all of which has yet to be determined.
The hearing started off with a presentation by Baker Tilly Principal Jason Semler aimed at helping the council understand its options regarding local income tax (LIT) in relation to changes coming to property tax collections through Senate Enrolled Act 1. He gave the example of a home valued at $240,714 in 2025 and showed a chart including standard deduction, Supplemental Homestead Deduction, and net assessed value of that home for the next six years.
By 2031, the net assessed value will have dropped by nearly 40%. The net assessed value of the home would need to increase by 50% over those six years to maintain its assessed value in 2025.
Semler recapped that cities and towns with populations below 3,500 cannot raise their own LIT but would have the option to do so by petitioning the county council. SEA 1 establishes that total LIT for all taxing bodies cannot exceed 2.9%. Beginning in 2028, county services, fire/EMS, and non-municipal rates for such entities as townships and libraries combined may not exceed 1.7%.
Currently, Porter County has the lowest LIT of all 92 counties in the state at .5%. Should it choose to do so, the council has until Oct. 31 to increase the LIT to start collecting increases in January.
For every .1% increase in the LIT, a resident earning $50,000 per year would pay an additional $1.92 per bi-weekly paycheck. As an example, if the council elected to double the LIT to 1%, a common percentage in several counties, that $50,000 per year earner would pay an additional $19.20 per month in income taxes to the county.
Beginning in 2028, SEA 1 eliminates the requirement on the county to put all LIT monies beyond the .25% that goes to municipalities and the $3.5 million to the Regional Development Authority into homestead credits. “From the SEA 1 counties are the big winners,” Semler said. He cautioned the council to “make sure you have balanced budgets, otherwise you’re going to be eating into your cash reserves.”
Councilman Jeremy Rivas, D-2nd, asked Semler for a good target reserve figure for the General Fund. He replied that reserves should be a minimum of 15%, preferably 25 to 30%, with 50% the ideal. “There are a few counties that have that,” Semler said of the six-month reserve.
“We’re at 34.35%,” Rivas said.
“I don’t want to get into eating those balances,” Semler replied, “because it’s hard to grow back.”
Council members have said little publicly about where they’ll take the LIT, except for Rivas and Council Vice President Red Stone, R-1st, who had the latest round in an ongoing respectful debate on how to deal with the county’s needs and fiscal limitations. “It’s just a lot of pressure on the taxpayer right now,” Rivas said.
“I want our roads fixed. I want IT. I want safety,” Stone ticked off the laundry list of items that might justify an increase in LIT, even temporarily. “I know nobody thinks a politician is going to lower tax rates,” he added of the thought of perhaps raising them for a time.
The two agree on one thing. “Yeah, the decision is we tighten our belts or we ask the taxpayers for more money,” Rivas said.
The council was scheduled to meet Thursday to approve budgets for the clerk’s office, the parks department, EMA, veterans services, and the Board of Elections & Registration.
Shelley Jones is a freelance reporter for the Post-Tribune.
