ANDERSON — Local taxing units have received a total of $8.9 million in additional local income tax and public safety funds from the state.
The Indiana Department of Revenue releases the funds when a certain percentage of the money being retained is reached.
The state distributed $5.7 million in supplemental local income tax funds and $3.2 million in public safety funds.
Local units of government are closely watching funding starting in 2026 as changes are implemented impacting the collection of property taxes.
Madison County is using the $2.2 million received in local income tax revenues to supplement the budget for the remainder of the year.
Earlier this year, the county took a $2 million advance draw on the spring property tax distribution to bolster the county’s general fund.
The City of Anderson received $1.9 million in local income tax revenues and $1.4 million in public safety funds.
Anderson Mayor Thomas Broderick Jr. said the sporadic distribution of supplemental local income tax funds means those funds can’t be included in a budget in advance.
“When we build our budget, we utilize the amounts from the previous year received, and then sometimes like this year we end up getting more than the prior year,” he said. “Unfortunately, due to the way the state operates, we really never know what that supplemental amount will be. In this case, we are aware that due to Senate Bill 1 (state budget), we are going to have a loss of revenue that is going to adversely affect the city over the next few years.”
Broderick said an unknown is the local income tax that can be implemented for Anderson and Madison County in the future.
“This is extremely important to understand because local income tax is our second largest stream of revenue upon which we operate,” he said. “In this case we will utilize these funds as we build our budget moving forward, but we will also be well aware of the fact that those figures are not sustainable year after year and are basically a one-time distribution.”
Broderick said his administration is beginning to work on the 2026 city budget, with negotiations taking place with several unions representing city employees.
“We want to make sure that we are protecting the city finances on behalf of the community as well as ensuring that our employees are properly compensated,” he said.
Elwood received $294,556 in local income tax funds and $222,718 in public safety collections.
Elwood Mayor Todd Jones said the infusion of money is “great news.”
“We will use the money in public safety to make up any losses in revenues that may be forthcoming,” Jones said of the changes implemented by the Indiana General Assembly to reduce property tax collections.
“We will move the funds into public safety,” he added. “Potentially, we may be able to hire new employees. Our initial plan is to use those funds for public safety.”
The town of Pendleton is receiving $101,120 in local income tax revenues and $86,020 for public safety.
Town Manager Scott Reske said the town council will make the decision on how to use the funds.
“Right now we’re going to hold on to the money until we know the effects of Senate Bill 1 on the town of Pendleton,” he said.
