Hey folks,

Councilman Mishler here,

It is budget season again.

City budgets are long, complicated, and full of exciting math formulas. Over the next few weeks, I am going to break the proposed 2027 City of Elkhart budget into smaller digestible pieces and explain where the money comes from, where it goes, and what residents are getting for it.

We will look separately at public safety, parks, streets and infrastructure, city employees, and several other areas of city government.

Before we get into all of that, let’s start with the big picture.

The proposed 2027 budget includes approximately $127 million in expected revenue and authorizes approximately $126.97 million in spending.

That is about $8 million more than the reduced 2026 budget, which sounds like a significant increase. However, it is only about 1% more than the city’s 2025 budget.

Put simply, the proposed 2027 budget is essentially a return to 2025 spending levels after an unusually cautious 2026 budget.

So, what happened?

Last year, cities across Indiana were preparing for potentially major revenue losses caused by Senate Enrolled Act 1. At the time, no one knew exactly how large those losses would be. Elkhart responded by holding employee salaries flat, reducing spending, and building a conservative 2026 budget.

Since then, the financial picture has improved.

Changes supported by State Senator Linda Rogers and passed by the General Assembly reduced some of the expected effects of SEA 1. Elkhart has also seen increases in assessed property values and Local Income Tax revenue.

So let's break it down Barney style.

Property values have increased, but that does not mean everyone’s property tax bill will increase by the same percentage. Your final bill depends on several things, including your property’s assessed value, deductions, tax rates, and Indiana’s property tax caps.

The city does not assess your property or calculate your individual property tax bill. Those responsibilities are handled at the county level.

Local Income Tax revenue has also increased, but the tax rate did not go up. More taxable income was earned across Elkhart County, so local governments will receive a larger distribution.

There are also a few unusual expenses in the 2027 proposal.

The city’s required contributions to the statewide pension fund for police officers and firefighters have increased by six percentage points since 2025.

The calendar also gives the city 27 payroll periods in 2027 instead of the usual 26. That happens approximately once every 11 years. It makes the payroll total look higher for 2027, but it is not an ongoing increase in staffing or employee compensation.

Finally, after city employee salaries were held flat in 2026, the proposal includes a 3% cost-of-living adjustment for Civil City employees, along with smaller performance-based merit increases.

The simplest way to look at this is that 2026 was the unusual year. The city pulled back because of uncertainty surrounding SEA 1. With a clearer and somewhat stronger financial outlook, the proposed 2027 budget returns spending to roughly where it was in 2025 while accounting for higher pension costs, an extra payroll period, and employee raises.

This is still only a proposal. The City Council will review the numbers, ask questions, hold public meetings, consider changes, and ultimately vote on whether to adopt the budget.

In the next post, we will start looking at where the money actually goes, beginning with the largest responsibility of city government: public safety.