Indianapolis mayor proposes record breaking $1.7 billion budget, trims to departments after property tax cuts

Indianapolis Mayor Joe Hogsett is proposing a new $1.7 billion dollar budget for 2026 — the largest to date — despite the expected decrease in funds from property taxes next year. The proposal makes cuts to many department budgets compared to last year.

The city estimated a shortfall of roughly $43 million dollars for 2026 in part due state lawmakers' cuts on property taxes earlier this year.

Mayor Joe Hogsett said while it might provide residents financial relief, it has forced city departments to be more efficient without eliminating services.

“That means we inevitably had to make some difficult decisions this year,” Hogsett said. “We had to ask our agencies to do more with less.”

Most departments were asked to cut about 4 percent of their budgets.

Indianapolis City Controller Abby Hanson said those cuts were made by eliminating chronically vacant staff positions, funds that went unspent and operational changes.

“We sought a precise and meaningful evaluation of the budget to avoid, across the board cuts,” Hanson said.

Public safety top priority

Public Safety including police, sheriff and fire departments along with the Department of Public Works were exempt from the cuts. 

The Indianapolis Metropolitan Police Department continues to receive sustained funding of over $355 million. Hogsett said they have been able to hire 100 officers in the past year and a half. IMPD is still not at the level of staffing it's been trying to achieve for years.

The funding also supports hiring bonuses and raised pay negotiated by the union last year.

Prior to the meeting, faith group LiveFree gathered outside the City-County Building to voice their concern over the proposed budget. Councilor Carlos Perkins spoke at the gathering and later released a statement that criticized continued record spending for police.

“There is a growing misalignment between the community's critical needs and the available resources,” Perkins said, “This situation will become increasingly urgent as state and federal impacts are felt in Indy. Public safety must mean more than just a badge.”

Community-led mental health response teams and MCAT crisis response programs will receive sustained funding. 

The city is also setting aside $8 million dollars to replace and repair Marion County tornado sirens.

Infrastructure efforts

The Indianapolis Department of Public Works will continue to receive significant funding for roads, stormwater, bridges, pedestrian and bicycle infrastructure. The city is in the middle of a five-year plan that spends over a billion dollars in infrastructure improvements.

This budget allocates $217 million for DPW that also receives funding through revenue it generates.

A new road funding formula passed by state lawmakers will provide the city with $50 million in 2027, that money needs to be matched. The city will dedicate an additional $10 million in road funding in the 2026 budget.

Housing and homeless support

The budget also includes additional funding for programs that aim to find housing for people experiencing homelessness. Mayor Hogsett said the need for supportive housing continues to grow, a January count found 1,815 people experienced homelessness on a single night. 

“This year’s Point in Time Count underscored that there remains work left to do with this year’s budget. We are strengthening existing initiatives and spearheading new ones,” Hogsett said.

A new program called Streets to Home will receive an additional $10 million. Programs that provide tenants with legal assistance and funding for home repairs will also receive sustained funding.

The council will spend the next two months reviewing the budget before its final passage that is scheduled for October 6.

Contact WFYI Managing City Editor Jill Sheridan at jsheridan@wfyi.org

Contact WFYI All Things Considered newscaster and reporter Samantha Horton at shorton@wfyi.org or on Signal at SamHorton.05