Correction: An earlier version of this story included a quote from someone misidentified as the communications director for the Indiana Forest Alliance.
Indianapolis Mayor Joe Hogsett made a demand this year that was simple but not easy to execute. Despite a significantly lower tax revenue forecast, the mayor wanted to pass a balanced 2026 budget without raising taxes or cutting any key city services.
The Indianapolis City-County Council on Oct. 6 approved a $1.7 billion 2026 budget that met those demands while increasing spending on public safety initiatives. But the councilors did have to reduce funding for some agencies and raise permitting fees for building homes and businesses to help plug a $43 million revenue hole caused in part by Senate Enrolled Act 1, the statewide tax reform plan passed by Indiana Republicans.
The budget passed 17-8 Monday night, with all six council Republicans and two Democrats voting no. The two Democrats who opposed the budget — District 11 Councilor Crista Carlino and District 13 Councilor Jesse Brown — also called on Hogsett to resign earlier this year over his handling of sexual harassment allegations within his administration. Both noted that the Marion County sheriff’s collaboration with Immigrations and Customs Enforcement deportation efforts were part of their rejection.
But a third Democrat who called for Hogsett to resign this year, District 14 Councilor Andy Nielsen, voted in favor of the budget and spoke critically of councilors who painted a largely negative portrait of the city in their public remarks.
Justifying their no votes, Republicans argued that more money should be devoted to infrastructure and less money spent on unproven “wish list” items like grants that fund grassroots violence prevention efforts. Some also defended SEA 1 for lowering property taxes for struggling homeowners and businesses.
“We talk about ‘revenue issues.’ Let’s be very clear: Senate Bill 1 and less property taxes means more money in the pockets of our constituents, which I support,” said District 21 Councilor Joshua Bain, a Republican who voted no on the budget.
After months of debate, here are the winners and losers of the 2026 budget:
Winners
Police and fire
Local law enforcement and the fire department were the only agencies exempt from cost-cutting requests that the mayor made to most city leaders.
Together, the Indianapolis Metropolitan Police Department, the Marion County Sheriff’s Office and the Indianapolis Fire Department make up more than 40% of the city’s total budget. They were allowed to increase spending in 2026 by between 6-10%.
IMPD’s budget, for instance, will increase 6% from last year to $358 million, a total that’s ballooned 46% since 2023.
Critics like Brown pushed back on the decision to fund the full force of 1,743 IMPD officers, noting that IMPD has employed fewer than 1,500 officers for the past two years and arguing that the money could be better spent elsewhere.
“We are contemplating now voting on a budget that keeps funding the sheriff’s office even while they continue working with ICE …,” Brown said. “We are contemplating a budget where we are funding hundreds of police officers that do not even exist.”
But IMPD’s union contract requires that the city allot money for the full force, leaders say. Most of the leftover money from unfilled positions is used to pay officers who work overtime.
Gun violence reduction efforts
Along with those major public safety investments, the city will also spend $4.5 million to support gun violence prevention efforts such as the Indy Peacemakers — activists in local neighborhoods who work to prevent violence within at-risk groups.
City officials say IMPD and these grassroots organizations deserve credit for helping to reduce gun deaths in the past few years. After a deadly spike to about 250 criminal homicides in 2021, that figure fell below 175 for each of the past two years and will likely finish even lower in 2025, according to IMPD data.
Still, the number of criminal homicides has remained above pre-pandemic levels, when the figure consistently stayed below 160.
Indianapolis road users
The city is paving the way to receive $50 million more in annual state funding by 2027 to repair Indianapolis roads, although obtaining the full amount will prove challenging.
House Enrolled Act 1461 allows Indianapolis to receive up to $50 million from a state matching grant program starting in June 2027, but the new law comes with caveats. To receive the full amount, the city must devote $50 million in “new revenue” toward road improvements. This means the Hogsett administration cannot simply shift money from its existing public safety or transportation budgets to inch closer to that amount.
In 2026, the city will direct $10 million in new income tax revenue to start up this fund. Until the matching grants kick in, DPW will use that money for strip-patching battered roads.
Hogsett’s Chief of Staff Dan Parker told IndyStar that much of the remaining $40 million needed to get the full state match will come from organic growth in the city’s income tax revenue collections. But that strategy depends on the city continuing to add more residents and high-paying jobs.
Overall, DPW’s 2026 budget reached $257 million, an amount that Parker notes is more than three times larger than the department’s budget in 2016 when Hogsett took office. As part of that funding, the city will implement its new snow removal policy starting this winter and plow all streets once four inches accumulate.
Indy’s homeless neighbors
The city will spend about $10 million to support a new effort to place more than 300 people living outdoors into permanent housing and allot $1.5 million toward free legal aid for renters facing eviction, among other homelessness intervention programs.
Streets to Home Indy, the three-year effort to end chronic homelessness led by the nonprofit Coalition for Homelessness Intervention and Prevention, could cost up to $50 million. With both the federal and state government showing distaste for “Housing First” approaches to reducing homelessness, the city and philanthropic organizations are the program’s main funders.
That money is timely because an increasing number of the roughly 1,800 people who are homeless in Indianapolis are considered unsheltered, living in tents, vehicles or abandoned buildings.
Losers
Local governments hit by SEA 1, state cuts
Between the Indiana General Assembly’s property tax reform legislation and other cuts to local governments, state lawmakers made changes this year that will be felt in agencies across Indianapolis.
City Controller Abby Hanson said Indianapolis will miss out on about $10 million in previously forecast property and income tax revenue in 2026 because of SEA 1. While tax collections will still grow modestly, SEA 1 lowered revenue projections by about $20 million in 2027 and roughly $30 million in 2028, according to Hanson.
The effects of state cuts show up in decisions made by local entities like the Health and Hospital Corp. of Marion County, the independent public agency that oversees Eskenazi Hospital and the county health department.
After the state cut a $38 million annual payment for low-income patients at Eskenazi Hospital, HHC will make up most of the difference next year by maximizing its property tax levy — the amount it can collect from the countywide pool of property tax revenue. Property taxes won’t increase for Marion County residents with the levy increase, but HHC will effectively take away money from other public entities that rely on the same pool of dollars, including the city.
HHC Chief Financial Officer James Simpson said in a Sept. 17 presentation that the money available to other public bodies, including schools and libraries, could fall by about 1% or $16 million.
Home and business builders
Starting in 2026, the Department of Business and Neighborhood Services will more than double some of its permitting fees for building or adding onto homes and businesses — higher costs that are likely to be passed on to homebuyers and renters.
The city will also charge larger penalties for zoning violations, which cover neighborhood nuisances and illegal land uses, as well as add new fees for building reinspections and violations of stop-work orders.
The new building permit costs vary by building type and square footage. Costs for the plan review and structural fee permits needed to build a new 2,500-square-foot home, for instance, would more than double from about $430 to more than $1,000. The fees for those same two permits on a new 25,000-square-foot business or multi-family apartment building would almost triple, growing from roughly $1,700 to $4,800.
DBNS Director Abbey Brands said the agency’s outdated fees no longer cover its cost of providing services. Penalties for some zoning violations date back to 1988 and costs for building permits were last updated in 2010.
Activists protesting sheriff’s ICE involvement
The Marion County jail’s housing of ICE detainees who are caught up in President Donald Trump’s mass deportation efforts garnered some of the harshest criticism during budget hearings.
Councilors said they were sympathetic to residents who demanded that they hold up Sheriff Kerry Forestal’s budget unless he agreed to stop housing ICE detainees. But only two councilors, Brown and Carlino, chose to vote against the budget while mentioning the sheriff’s work with ICE, while most decided that the sheriff faced too severe a threat from state leaders to alter course.
Attorney General Todd Rokita has already sued the Monroe County and St. Joseph County sheriffs for their alleged lack of cooperation with ICE.
The Marion County Adult Detention Center has held more than 800 ICE detainees in 2025 through mid-September, most of whom are men from Mexico or Central America, according to records obtained by IndyStar. Many have stayed in the county jail for days or weeks, but some have been detained for more than five months.
ICE pays the sheriff’s office $75 per day for each detainee held at the jail, racking up more than $1.2 million in expenses through August, sheriff’s office records show.
Indy’s urban forest advocates
Environmental advocates were again rebuffed in their push for the city to allot $3 million in the 2026 budget to buy and protect some of the remaining urban forests across Indianapolis, most of which sit on private property and could be destroyed by commercial development.
The Indiana Forest Alliance estimates that tree canopy covers about 27% of Marion County, a figure that’s fallen from 32% a decade ago. The group has urged the city to buy and preserve private wooded parcels for the environmental benefits like cleaner air and better stormwater filtration, as well as health benefits for city residents deprived of greenspace.
“For years, Indiana Forest Alliance and our partners have been pushing for standalone, recurring funds for urban forest preservation,” IFA Executive Director Dave Seastrom said in a statement. “We have identified several key forests in need of preservation. Some of these could be lost to development before next year’s budget if the city does not take action.”
But city leaders have made some concessions to the forest advocates, according to a spokeswoman for the mayor. She said $3 million set aside for “urban forest and land conservation” has yet to be spent, and DPW plans to devote $4 million to the issue over the next four years.
City-County Council Democrats said in a press release Monday that by the end of this year, they plan to create “the city’s first dedicated, non-reverting fund for tree and forest preservation.”
Email Indianapolis City Hall Reporter Jordan Smith at JTsmith@gannett.com. Follow him on X: @jordantsmith09
This article originally appeared on Indianapolis Star: Home builders lose, drivers may win in Indy’s 2026 budget. Here’s what to know
Reporting by Jordan Smith, Indianapolis Star / Indianapolis Star
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