New Castle Mayor York: 'All confidence is gone' in state lawmakers

“This is going to hurt New Castle terribly,” York said. “This has absolutely nothing to do with Democrats or Republicans. This has put us all in the same log jam.”

“We have state legislators who voted this in in a snap just because it’s what the governor wanted,” York said. “They had no idea what sort of tailspin this would put us in.”

Funding cuts for local governments

Property taxes pay for local government services, such police and EMS and public libraries and schools. While state lawmakers might look like good guys for cutting taxes, they are actually hurting the local governments and local communities, York said.

SEA 1 allows cities and counties to raise their local income taxes to offset the property tax cuts.

“But the state and federal governments already have a limit on how much we can raise that tax. That leaves a $750,000 to $800,000 shortfall,” York said. “So where are we supposed to come up with that money?”

York said property tax bills are still going up in 2026 because assessed property values have all gone up. Because of SEA 1, the increase will be less than New Castle officials had originally planned for – nearly $1 million less.

Based off SEA 1’s new rules, New Castle Clerk-Treasurer Ashley Huffman created a 2026 budget that was $560,250 less than the city had budgeted for. The day that budget was submitted to the state, financial advisor firm Baker-Tilly received new numbers that showed New Castle’s projected loss at $900,000.

York expects 2027 to also be $1 million less than originally projected. 2028’s original projected loss was $1.1 million.

“Now think closer to $1.5 million,” York said. “That money is what we pay payrolls out of and buy equipment, like fire trucks and dump trucks.”

Under SEA 1, 2028 is also the year the public safety local income tax (LIT) will go away. The Public Safety LIT helps fund firefighters, police and EMS in Henry County, New Castle and the local towns.

“State has always collected it and passed it on to us,” York said. “In 2028, if municipalities want to collect it, they need to raise local tax.”

The Public Safety LIT is also restricted by state rules, York said. He expects those limits to create another $750,000 shortfall for public safety in New Castle.

“This is a totally separate tax,” he said.

Tough local decisions

York has heard the suggestions from some people that New Castle should apply for more state-level grants to help with local projects.

He said SEA 1 and the property tax cuts are taking that option away from him and the city council.

“We’re not being pinched, we’re being rung out like a beach towel,” York said. “We won’t have any match money for grants they put out there ... We won’t even have a rainy day fund.”

The New Castle EMS Department recently eliminated six positions through attrition in order to stay within its budget. York hates that those positions had to be cut, since New Castle EMS was the first in the state to be able to carry whole blood for trauma patients.

He said New Castle Fire Department also recently sold its largest ladder truck to bring in more money.

York said the city also has a partial hiring freeze and are only bringing on new employees when absolutely necessary.

York said New Castle residents will not see a lack in services for a few years, because the city government is making internal sacrifices.

“In 2028 to 2030, they will see the effects,” he said. “It (SEA 1) is making me make decision not how we will grow in the future, but decisions of what to cut because how are we going to survive in the future.”

One of those decisions could eventually be about the future of the New Castle Transit Department, the city’s ride-share bus system. It costs about $1 million to keep that department running each year, York said.

“I can’t keep the transit open if I have to lay off police, fire or EMS,” he said. “It makes me sick to think we’d have to cut our transportation department. But the choice between closing a bus station or fire station is not a choice. We will not lose professional services.”

No ‘Plan B’

York and other Indiana mayors went to the Statehouse this spring to tell lawmakers how SEA 1 (then called Senate Bill 1) would affect local communities.

“I felt like I was talking to a bunch of bobblehead dolls in the gift shop,” York said, describing empty smiles and head nods. “They didn’t listen to a word we said. They voted near unanimous.”

One of York’s biggest frustrations is that none of the state lawmakers can say what the goal of SEA 1 is, besides letting Gov. Braun say he delivered on a campaign promise.

“After 4 years, will we have reached the goal?” York wondered.

York said he personally met with three different lawmakers and asked them “What’s Plan B if this doesn’t work?”

According to the mayor, state lawmakers did not have a “Plan B” if SEA 1 did not work as they expected it to.

“They told me ‘we’ll fix it’ if is doesn’t work. I have no confidence in them to fix it,” York said. “They’ve put us in a terrible, terrible situation, and I have absolutely no confidence that they can figure out how to get us out of this.”

York said the cuts to local governments, in addition to state-level cuts to economic development programs, will take the state of Indiana completely out of the running for attracting new business and retaining existing business in the next four-to-five years.

“There’s nothing about SEA 1 that is good for New Castle,” he said. “There are no roads that lead to a better success for the future for the city of New Castle”

Regional leaders share impacts of SEA 1, propose legislative fixes

York’s fourth and final term as mayor ends in 2027. He said the one thing he’ll miss the most is meeting with other mayors in Accelerate Indiana Municipalities (AIM), which used to be Indiana Association of Cities and Towns (IACT).

“In AIM, it’s never about Democrat or Republican,” he said. “It’s about what can we do to make our communities the best in the state of Indiana.”

AIM organized a community roundtable discussion on Nov. 17 in Richmond on to discuss the real-world impacts of SEA 1 on their communities and urge the Indiana General Assembly to make critical fixes to the legislation during the 2026 session.

The conversation highlighted how the 2025 law, introduced as a vehicle for property tax relief, is creating budget uncertainty, impacts to essential services and long-term concerns about the viability of cities and towns.

Like Mayor York, community leaders from around the state told AIM the law’s unintended consequences have impacted cuts to public safety and EMS services, road maintenance, and other basic municipal services.

Mishawaka Mayor Dave Wood said his city stands to lose $15 million, or 20 percent of its general fund, because of SEA 1. Wood said Mishawaka could eliminate all other city departments and would still have to cut into public safety to find that level of savings.

As currently written, SEA 1 also creates particular challenges for smaller municipalities under 3,500 residents, which must now petition their counties annually for revenue distributions, introducing increasing instability into local budgeting, AIM stated.

Additional pressing concerns included:

• Annual adoption requirements creating budget instability

• Lack of reliable revenue projections from the State for 2026, 2027, and 2028 budgets

• Rate splits favoring counties over municipalities

• Challenges for municipalities under 3,500 residents

• Technical issues with debt coverage and TIF neutralization

• Government modernization and efficiency measures

Columbia City Mayor and Aim 2026 President-elect Ryan Daniel emphasized that local officials are not opposed to tax reform, it’s a more balanced approach that is necessary.

“Hoosier communities are stretched thin without adequate funding to provide the services our taxpayers deserve and the funding required to attract new residents and businesses,” Daniel said. “As long as we are all working together, with an understanding that the tax reforms must complement the need for our municipalities to be fiscally healthy, I think we will see a productive legislative session.”

While the Nov. 17 meeting reinforced the fiscal realities of SEA 1, AIM staff revealed a list of technical amendments to SEA 1 that would preserve the policy goals behind the new law while offering more flexibility for local units to continue providing the services and programs their communities need. And tackling calls from the legislature for all units to look at local service delivery models to find savings and innovations, AIM revealed several important measures, such as amending the government modernization statute to make restructuring less complicated and more flexible.

The Richmond roundtable is one of ten being held across Indiana in November, including stops in Mishawaka, Schererville, West Lafayette, Speedway, Terre Haute, Evansville, Jeffersonville, Fort Wayne, Richmond, and McCordsville. The events are part of a coordinated effort to educate legislators about local impacts and build support for legislative fixes before session begins in January 2026.