The counties genuinely under pressure

The counties genuinely under pressure

No county has missed payroll or defaulted. But a screen of the numbers against councils' own records finds 13 counties straining both ways, and the squeeze concentrates in mid-size counties — big enough to run jails and carry debt, without a large commercial base to spread the loss. The sharpest cases, and why:

The worst cap loss in the state — 25.3% of its levy, $8.5M gone — on top of $91.8M of debt. Its council president told departments "just don't do it" about routine spending increases.

The largest dollar loss anywhere: about $46M by 2028. A council president there called it "a financial crisis with Senate Bill 1." The county held its budget flat and cut vacant jobs.

Loses $12.2M by 2028 and $17.6M to the caps in 2026. It gave no general raises for 2026.

Cut about $2M from 2026 with a $100M jail coming due, and debated a Rainy Day draw after the auditor warned that fund partly backs the jail bond.

These four didn't miss for lack of effort — they got locked in before the rules changed. Each had committed to a jail years earlier, when revenue looked steady, and a jail bond is a fixed payment that doesn't shrink when the caps take a bite, so it eats the shrinking base first and leaves little to restructure. And a jail is no escape from the cap. The only taxes the ceiling can't reach are the ones voters approve at referendum; a normal jail bond, financed the quiet way through a building corporation, sits inside the cap like everything else. So the payment survives and the services around it — the sheriff, the courts, the general fund — absorb the loss. It is the opposite of a way out. And the base shrinks fastest exactly here. These are older industrial counties — Muncie, Anderson, Gary, South Bend — full of lower-value homes already sitting at the 1% and 2% caps, so when values rose the circuit breaker erased the increase instead of letting the county collect it, while a thinned-out commercial base left no one to spread the loss onto. The counties that got ahead of this moved in 2024 and early 2025, before SEA 1 froze how fast levies can grow — refinancing debt, locking in rates, raising the local income tax while the base was still whole. By the time these four saw the full 2026 numbers, that window had closed and the freeze was on, so they couldn't grow their way back out.

The common thread: these are counties where values rose, the taxable base didn't keep up, and a big obligation — almost always a jail — is landing at the same time.