Daviess County Council approves new local income tax in response to Indiana Senate Bill One

The Daviess County Council has agreed to add a new local income tax. The council voted unanimously to impose a 0.1% Emergency Management Service tax on all county residents. Daviess County Council President Marilyn McCullough says the action came in response to Senate Bill One that wound up cutting property taxes in the county by $1 million.

“We have a projected shortfall of $1 million for 2026. The state is reducing property taxes and then telling the counties here is what you do to make up that shortfall,” she said. “They are giving us a lot of different choices of local income taxes to recover some of those lost property tax funds.”

As county officials look to keep the budget balanced they looked at big ticket expenditures. The budget for EMS this year is $800,000.

“One of the big budget items coming out of the general fund has been emergency medical services,” said McCullough. “We want to assure that everyone in our county has access to good care and that it is there when people need it. We need to have up to date equipment.”

McCullough points out that the tradeoff between the lower property tax and increased local income tax should be a net wash for people in Daviess County.

“People in Daviess County are projected to see decreases in their property taxes on average of $350 per year, she said. “We had a study done that shows that the median household income in the county is $68,561. That should come out as the same amount of money per household. We are trying to be pro-active instead of reactive. We know what we are facing over the next few years and then everything changes in 2028. Everyone in county government has made a great effort to cut out any waste. We are now down to needs versus wants and this is about the need for an ambulance service.”

The new tax is expected to raise $1.1 million, and while it will be directed toward EMS service it can be spent to assist other emergency responders.

“This funding can be used for some additional training for volunteer firemen and help them get improved certifications,” said McCullough. “There are other uses of this money that we will look at as well. While it raises more than we are spending on EMS now we want to look at other things we can do with that money to assist the community.”

McCullough calls the action a tax-shift away from property owners.

“If you look at Senate Bill one that is exactly what we’re doing,” she said. “They are shifting the tax burden to local government and telling us to look at various local taxes to make up the difference.”

The tax will begin on Jan.1, 2026.

“We are going to review this year by year to determine what we need to do,” said McCullough. “There are other local option income taxes available, but at this time we do not intend to put any of those other taxes in place.”