Local municipalities work to save operations budget after Senate Enrolled Act One passed

MISHAWAKA, Ind. — Local governments, including the City of Mishawaka, are working to mitigate the damage they say they'll face with Senate Enrolled Act One or SEA One.

SEA One is a property tax and local income tax reform law passed in 2025. It will reduce the property tax bills Hoosiers pay over the next few years. While its purpose is to give Hoosiers a break, local municipalities say will feel that break in a totally different way.

Executive Director of Development and Governmental Affairs for the City of Mishawaka, Matthew Lentsch, says services like snow removal come from the City's operations budget which is a little over $60 million and could see a $15 million shortfall due to SEA One.

"It’s the upkeep of our parks; it’s upkeep of our roads. It’s making sure we have the very best police and firemen on the street," said Lentsch. "We’re going to have to look at everything if our budget is cut by $15 million including how many people are serving as you know in public safety as police and firemen.”

Lentsch says a good portion of the operation budget comes from property taxes. Snow removal, park upkeep, a strong police and fire presence, Lentsch says it's all on the line now.

As someone who not only works for the city but lives in it, Lentsch says he wants his quality of life to remain the same.

"From my perspective, the $300 or $500 that would be cut from property taxes, we'd end up paying more in terms of local option income tax potentially or just diminished services, and it's just not worth it to sacrifice public safety, to sacrifice quality of our parks for a few hundred dollars," Lentsch shared.

Lentsch says if there aren't changes made to SEA One, there will be "real world, real Mishawaka consequences." Those consequences look like five less snowplows on the streets when it snows and the upkeep for parks not looking the same as it does now. Many of the parks in the city have splash pads which may not be on as often and if they are, it will be for a limited time.

There is a new bill trying to delay the damage local governments statewide will face, Senate Bill 238. It was introduced in the Senate on Jan. 8 and has been referred to the Senate Tax and Fiscal Policy Committee for consideration. The bill is authored by Senator Linda Rogers of Granger (R) and co-authored by Senator Blake Doriot. The bill is designed to:

• Delay the effective date of key local income tax changes from 2028 to 2029 providing extra time for local planning and implementation.
• Remove the requirement that counties and municipalities must re-adopt their local income tax rates each year, reducing procedural risk and potential revenue Volatility
• Adjust population thresholds that determine municipal eligibility to adopt local income tax rates, potentially expanding opportunities for more cities and towns to access local income tax authority.
• Amend various local income, tax rate structures and thresholds, restoring some flexibility and reinstating certain appeal provisions that were repealed under SEA One.