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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowIndianapolis Mayor Joe Hogsett’s administration introduced a $1.7 billion budget for 2026 Monday evening that required some cuts to offset reduced revenue caused by newly approved state property tax relief and to pay increased wages under newer union contracts.
The Hogsett administration said the mayor has no plans to seek a tax increase in 2026. That’s despite the fact that the city’s 2026 tax revenue is now expected to be $43 million short of earlier expectations, according to Indianapolis Controller Abby Hanson.
She told IBJ on Aug. 6 that leaders of the administration knew that increased salaries and benefits in new union contracts would create a tough budget situation. But she said this budget was “prohibitively tight” in part due to the effects of Senate Bill 1, which Gov. Mike Braun signed into law earlier this year. That bill is expected to lead to steep drops in property tax revenue for Indiana local governments and is projected to mean $10.5 million less in tax revenue for Indianapolis than would have otherwise been expected.
City leaders also cited new costs, including a required match to receive new state road funding in 2027 and a lost grant within the Indianapolis Fire Department, for the revenue gap.
As a result, the Hogsett administration asked all non-public safety agencies to propose budgets that included a 4% reserve. Public safety-related agencies were asked to limit the growth in their spending to 2%.
Dan Parker, the city’s chief deputy mayor, said the agencies were told, “Don’t cut bone or muscle.” Most cuts came from funds that were historically underspent or roles that have gone unfilled.
One agency, the Department of Business and Neighborhood Services, will begin bringing in new revenue in 2026. The permitting and enforcement arm of the city will introduce a new fee for customers that could bring in $5 million annually, city officials said.
The changes, along with some shifts in how income tax funds are allocated, was enough to make up the gap, administration officials said.
The mayor presented the budget to the Indianapolis City-County Council on Monday, and the council will hold public hearings and deliberate on the budget beginning Tuesday evening. The final budget hearing, when the full 25-member City-County Council will hold a vote, is set for Oct. 6.
Public safety, infrastructure investments remain high
The Indianapolis Metropolitan Police Department’s budget—at nearly $359 million—makes up 29% of the city’s spending. It is closely followed by the Indianapolis Fire Department, at $283 million, and the Department of Public Works, at $257 million. Each account for 22% of the budget.
IMPD’s budget includes a $19 million increase over 2025 to cover the cost of the Fraternal Order of Police’s new labor contracts. It also continues to fund public safety technology, including mobile trailer cameras, license plate readers and analysts at a real-time crime center to monitor these devices.
City officials also plan to allocate $10 million to homelessness initiatives, including a Streets to Home program that got underway this year.
The Indianapolis Fire Department’s budget is proposed to increase $24.5 million over 2025, in part to pay salaries for 65 new recruits. The fire budget also includes $8 million to replace Station 33 on the northwest side
The Metropolitan Emergency Services Agency’s proposed budget includes $8 million to replace outdated tornado sirens and invest in the outdated county-wide emergency response system.
Planning for road-funding match
Road-funding legislation passed this year would give Marion County an additional allotment—up to $50 million in 2027 but requires a city match.
City leaders are starting to budget for that this year by spending $10 million in new income tax revenue on strip-patching, which will count toward the match.
The income tax allocation is in lieu of increasing the wheel or excise taxes in Marion County, which was authorized by the bill. Hogsett has opposed increasing the wheel or excise tax rates under the current funding structure, which the city says underfunds Indianapolis roads compared to its rural counterparts.
Maintaining priorities, new investments
Despite seeing a 2% decrease in spending, the Office of Public Health and Safety will continue to fund and expand some existing programs. They include:
- The Indy Peace Fellowship—which employs people to disrupt potential incidents of violence—at $4.5 million.
- The city’s Elevation Grant program, which doles out funding to community organizations focused on anti-violence.
- Legal assistance in all nine township courts and Marion County Superior Court to assist residents with evictions through the Tenant Advocacy Project. A proposed increase for that program would bring the budget from $250,000 to $750,000 and pay a full-time employee.
- The Clinician-Led Response Team and an expansion of the team. The program provides a non-police response to mental health and addiction-related crises in three IMPD districts and will expand to a fourth in 2026.
- Funding for the Assessment and Intervention Center.
Parks and Recreation will spend $57.7 million on park improvements in the coming year, some of which comes from an $80 million Lilly Endowment grant to the city in late 2022.
The Department of Metropolitan Development will expand its existing master-leasing program, which allows the city to lease residential units and sublease them to people experiencing homelessness. The program will increase from 20 units to 50 units.
The department will also maintain spending on a homeowner repair program previously funded through federal grants.
The Indy Arts Council will maintain the funding level it received last year—$1.3 million from the city’s budget, along with $500,000 each from the Indianapolis Bond Bank and the Capital Improvement Board.
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I guess he has no money to mow the Pine street overgrowth at pine and Maryland. Been asking your soldiers for three years mayor. None of your staff are responding.
Let’s clear the way for faster permit approvals, so more development/redevelopment can happen faster – results in more tax revenue, yes?
number one there should not be any government unions – that whole notion is oxymoronic. secondly – maybe they can cut some expenses somewhere? they certainly aren’t spending money on the right things.
Hogsett is the worst mayor in my lifetime.
You can thank John Kennedy for the public unions.
Government unions do exist and so do state budget cuts, so you work within the reality you live in.
And, gosh, cutting expenses somewhere–what novel idea that no one has ever thought of before!
Here is another reality, what is just an expense to one person is an important service or piece of infrastructure for another person. There is an entire months long budget process that is open to public input where local legislators and the public can review what the city spends money on and help determine what should be the priorities given the limited resource.
You can thank Congress and President William Howard Taft for signing into law the Lloyd-La Follette Act granting *federal* employees the right to join labor unions in 1912.
In Indiana, state and local employees began major unionization efforts beginning in the 1930’s.
At some point one has to wonder what is the point of living and paying taxes in Marion County when literally every surrounding county offers a better quality of life.
You can always move.
Is there a $300K line item in the budget for the legal fees he cost the taxpayers?
The unions have been here for almost a century and here to stay. The police, fire and Emt’s deserve every penny of their budgets.
There is no short comings in the budget, just a lot of waste and misspending on unnecessary items. Free money from Lilly for parks, but still spending on homeless and home repair after that free money went away. $1.3M on Arts Council! Mostly a waste.
$4.5M on violence interrupters? Ha! Yeah good use there since we have no proof or statistic to justify that.
$750K for evictions? Really!?
We did get an additional $50M for roads, but need to match it, which was always there to begin with.
The remaining rationalizations and misspending for pet projects does take a big share, but blaming idealistic management desires on short comings of funds is a joke.
I think you have valid concerns but I feel like it should be noted that we *do* have stats on the violence intervention program. That seems to be working, as violent crime in Indy has fallen by 28% since 2020.
Inefficiencies? I am struggling to understand why the Fire Dept is increasing their budget by $24.5 million (in part for 65 new recruits). That “in part” must be a really small part, as that would equal $376,923/recruit. That cannot be all going to new employees, so it is not fair to the public to see these figures with that kind of explanation. Is that too much to ask?
My guess is that this includes training, on-boarding, and new equipment for the new employees. Those aren’t cheap things to buy!
@A.R. “That seems to be working, as violent crime in Indy has fallen by 28% since 2020” BULL-FUCKING-SHIT!!!!!
“Inefficiencies? I am struggling to understand why the Fire Dept is increasing their budget by $24.5 million (in part for 65 new recruits). That “in part” must be a really small part, as that would equal $376,923/recruit. That cannot be all going to new employees, so it is not fair to the public to see these figures with that kind of explanation. Is that too much to ask?” 1
1 new station at an average cost of at least 4-5 million, plus new and much needed replacement apparatus at 800,000-a million, including a new heavy rescue for 14’s at a million+ fully equipped, 65 new new firefighters with an average cost to fully outfit roughly $12,000 each!!!!
Remember when Joe was going to hire “Social Workers” to go out and deal with the mentally ill and deescalate all the violent situations the police couldn’t handle. ‘What a dumb liberal joke. I don’t see where this program was so successful we are hiring more. In fact, I haven’t heard anything about this grand idea. And the whole crime is down 28% is a joke. The numbers in Indy and most American cities became manipulated with the FBI in Joe Bidens world. Don’t believe me. A real journalist should ask the city about it.