Discussions about Beech Grove’s 2026 budget became heated as the Common Council tried to scrounge up $600,000.
City leaders blame the shortfall on a new property tax law. It will allow homeowners and businesses to pay less in property taxes, but it will reduce the amount of revenue that local governments receive to pay for public services.
During the Tuesday, Sept. 2, council meeting, Beech Grove Mayor Jim Coffman, Clerk-Treasurer Samantha Stratton and six of the seven councilors announced that they would forgo their annual 3% raises to aid the city budget. Councilor Michael Hemmelgarn didn’t attend the meeting.
But that would only save about $6,000, according to Stratton.
Some councilors asked department heads to also decline their cost-of-living raises. Parks Department Director Tom Hannan obliged. But Michael Maurice, chief of the Beech Grove Police Department, said the request demonstrates a lack of support, and goes against the city’s 2023 contract with local labor unions.
“When you’re asking your employees to not take a raise, or to take a pay cut, you’re saying that you don’t want to pay for the services that are provided to you and the citizens,” Maurice said.
How did we get here?
Beech Grove’s proposed budget for 2026 is over $20 million, roughly $900,000 higher than 2025.
The changes include 3% payroll increases, a 3% hike of roughly $106,400 for its contract with the Indianapolis Fire Department and an average 5% increase in utility fees and city insurance policies.
Jeff Peters, Beech Grove’s financial advisor, said councilors can fund the budget the way it’s currently written. But he urged councilors to consider how current funding gaps could be exacerbated in the future.
“You can fund the budget and consume that amount of cash,” Peters told councilors during the meeting. “The problem with that is, as we go forward in time, that will get harder and harder.”
Peters said he and the state’s Department of Local Government Finance estimate that the city’s general fund will have roughly $2.4 million at the end of 2025. But, Peters said, the city’s finances could drop to $1.8 million, or even $1.2 million, by the end of 2026.
Now the Beech Grove council is trying to bridge an estimated $600,000 to $1.2 million gap.
During the August council meeting, city leaders raised residents’ flat-rate sewer fee to help prevent a $1.7 million shortfall for the utility’s budget. Many community members voiced concerns about the $13 bill hikes amid inflation and growing economic turmoil.
In response, councilors approved new sewer rates through 2026, but declined the option to set fees for 2027. That’s despite warnings from Stratton and Peters, who have said the sewer utility is “severely underfunded.”
Last month, Peters said the city should save as much money as possible as they prepare for the impacts of the state’s property tax cuts. He said the new property tax law could, over time, dissolve small cities and townships. Officials are also at a disadvantage, Peters said during the September meeting, because local governments probably won’t know the full impact of the law until 2027.
Some councilors, such as Dan McMillan, hope state lawmakers will address concerns about the funding dips during next year’s legislative session. But Elizabeth Lamping, the only Beech Grove councilor who’s contacted state representatives, said she doesn’t think lawmakers will come to their aid.
“Legislators are telling me we got a snowball’s chance in hell of that happening,” Lamping said. “That’s because (Gov. Mike) Braun and the Republican legislators don’t want it.”
What’s next?
The Beech Grove Common Council will hold a public hearing for the budget at 7 p.m. on Monday, Oct. 6, in the council chambers of Beech Grove City Hall, 802 Main St.
Councilors are expected to vote on the budget at 7 p.m. on Monday, Oct. 20, at Beech Grove City Hall. Community members can also livestream the meetings remotely.
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Mirror Indy reporter Elizabeth Gabriel covers the south side of Marion County. Contact her at elizabeth.gabriel@mirrorindy.org. Follow her on X at @_elizabethgabs.
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