Vigo County oversight committee: finances strong but state tax changes pose risks

At a meeting of the Vigo County oversight committee, Tim Berry, a consultant with Crowe, told members that the county’s overall cash position is “very, very strong” but cautioned that recent state law changes could introduce instability.

Berry, who said his team was engaged to analyze the county’s current finances and produce a five-year outlook that incorporates work by Baker Tilly, told the committee that Vigo County’s total cash across all funds is roughly $169 million and that the general fund cash balance at the end of 2025 was $32,847,196 — an amount he said has equaled about 60% of the county’s annual general fund expenditures over the last five years. “To ever state that Vigo County’s finances are not is is certainly an exaggeration,” Berry said.

Nut graf: The committee heard that while reserves and jail-related funds exceed the targets set by a 2022 ordinance, state changes to property-tax breaks and local income tax (LIT) allocation under Senate Bill 1 — and the subsequent legislative adjustments this year — could reduce property-tax revenue and push more funding dependence onto LIT, which fluctuates with the economy. Because of those risks and because updated five-year estimates from Baker Tilly are still pending, the oversight board agreed to delay its recommendation from mid-April to July.

Among specifics, Berry said the ordinance the county adopted in 2022 (2022-03) called for putting funds aside to pay off jail bonds issued in 2019 when they become callable (July 2029). He reported that the jail special-purpose fund had a cash balance of $13,957,434 against a target the ordinance listed as $10,575,000, and the correctional facilities fund held $24,517,887 against a cited target of $5.5 million. Taken together, those funds totalled approximately $38,475,321 versus a combined target the ordinance had set at about $16,075,000.

Committee members asked how callable interest rates might affect any decision to call bonds in 2029; Berry said current bond rates are around 5% and callable rates would be a little over 3%, a factor the county would weigh if it considers calling the bonds.

Berry also described how Senate Bill 1 will be phased in and how it has already begun to affect circuit-breaker pressure on property-tax levies. He said the law will phase in residential tax breaks over the next five years and that counties will likely depend more on local income tax dollars. As background, Berry said Vigo County’s current LIT rate is 2% (set after a 2018 change that took effect in 2019) and that the 2% included sub-allocations for public-safety answering points and jail-related purposes. Under the statute Berry summarized, if local jurisdictions cannot reach a MUST agreement on allocations, a county could adopt an LIT not to exceed 1.2% and municipalities over 3,500 people could adopt their own rates up to 1.2%.

On 2026 distributions, Berry read figures into the record: the transcript lists total LIT collections for the county as 56,798 (units not specified in the record); he also said the county receives about $33,400,000 (roughly 59% of the total), the city of Terre Haute receives about $18,000,000 and school corporations receive about $1,600,000. Berry stressed that current statutory and distribution mechanics tie allocations to property-tax levies and that the state has asked each county to convene a MUST committee to recommend allocations and report to the Department of Local Government Finance by December so the General Assembly can review the results ahead of the 2027 session.

During Q&A, a committee member identified as Jim asked whether the change effectively forces communities to make local decisions about how to value education and other services; Berry replied that not all school corporations receive LIT in the same way and that guidance from the state has been limited, so local outcomes will vary. Berry said the county would likely need to collect close to 1.2% under the proposed statutory approach to replace the current revenue stream and that while the county appears able to do so, other local units may not.

On next steps, Berry said the oversight team is awaiting Baker Tilly’s updated five-year forward-looking estimates and will meet with the oversight board’s legal counsel. The committee agreed to move the recommendation target from mid-April to July while staff and consultants complete legal review and updated forecasts.

The meeting closed with no substantive public comments recorded, a reminder to vote, an announcement of the next meeting time and a motion to adjourn, which carried.

(Reporting note: all quotes and figures are taken from the oversight committee meeting transcript and referenced materials presented at the meeting; where the transcript omitted units or was unclear, the article flags that explicitly.)