Dubois County Council weighs employee raises amid budget constraints

Council debates 1-3% raises for 2026 budget while facing $600,000 revenue cut from Senate Bill 1

The Dubois County Council faces difficult decisions about employee compensation as it prepares for the 2026 budget cycle. Recent state legislation has resulted in significant revenue reductions.

Council members are grappling with how to balance fair employee compensation against a projected $600,000 revenue cut resulting from Senate Bill 1, which caps property tax growth.

The council must provide department heads with guidance for budget preparation by June 1, but they’re working with incomplete information about future revenue. The assessed value for the county won’t be certified until August 1, and with the unclear impact of the Senate bill, the council struggled with how to proceed.

The council is considering employee raise options ranging from 0% to 3%, with most members leaning toward a 2% target that could be reduced if necessary during final budget deliberations in August.

“We say a percent that we want to try to achieve, we can still roll it back, but we can’t roll it forward,” said Council President Mike Kluesner.

He added that if they have to roll it back, it would be a disappointment for employees who had anticipated those raises.

Kluesner initially suggested a 1% raise as a starting point, expressing concern about fiscal responsibility given the revenue outlook.

“It’s hard to talk about raises when you’re going to be losing so much next year,” Councilman Ryan Craig said.

Other council members advocate for higher percentages, noting that inflation has outpaced county wage increases in recent years.

“I don’t want to shortchange our employees if by some miraculous…,” said Councilwoman Deena Lewis. “I don’t want to tell our employees no before we give it a chance to say yes.”

She added they could at least use the current inflation rate as a starting point.

“I did a little research and it seems like the cost of living increase was like around 3% for last year,” said Councilman Doug Uebelhor. “Since COVID, cost of things have gone up about 24%, our raises since then have only been 18% over those six years.”

The council ultimately reached a consensus on targeting a 2% raise, acknowledging they can reduce this percentage later if budget realities require it, but cannot increase it once budget forms are submitted to the state.

The health department faces particular challenges with funding cuts of up to 60% to the Healthy Indiana Program that began last year.

Kluesner reported that after meeting with health department officials, two part-time employees have already been informed that their positions will end this year due to funding reductions.

“It’s a no-win situation technically and it’s not going to be fun for anybody to have to tell them that you don’t have a job,” Kluesner said.

The council also discussed the need to better communicate the full value of county employment benefits to staff. Councilman Alex Hohl noted that while wage increases might lag inflation in some years, the county’s healthcare benefits are exceptional compared to those of many private employers.

“I’m at a moratorium. No raises. You got to have an attitude of gratitude,” he said. “We got the best health care second to none.”

The county is currently working through providers to lower healthcare costs. The county commissioners met with representatives Monday morning to discuss options.

“We need to talk about the taxpayers that probably just paid the record tax bill and then they don’t get a raise in a private industry,” Hohl said. “But they see that after the record tax bill, we must start a 2 to 3% raise for county employees that are fairly well compensated and with excellent health care.”

Lewis advocated for a better system notifying employees of the cost the county carries for their individual healthcare plans.

The council also faces additional budget pressures for 2026, including a 27th pay period that will cost approximately $500,000.

“That’s another $500,000,” Morton said.

Kluesner read from a statement that as the legislation has reduced the county’s ability to rely on property taxes to meet it’s needs, they have suggest counties use income tax instead.

The funding option that the legislature is suggesting is raising the local income tax, which negatively affects wage earners,” Kluesner said. “And I truly believe that…the lower-income people get hurt when you start raising income taxes.”

Kluesner urges all county departments to look for efficiencies and cost savings.

“As we plan our 2026 budgets, I ask that all county employee heads and employees look into ways that we can eliminate waste and help become more efficient and effective with our taxpayer dollars,” he said.

The council plans to continue discussions as more budget information becomes available. Members also discuss attending upcoming Indiana Association of Indiana County Councils meetings on June 21 and a budget workshop the day before to gain more insights on navigating the challenging fiscal environment.