City Releases Impact-Driven Budget Plan Centered on Essential Services in a Tighter Fiscal Climate

The Thomson administration has released the proposed 2026 City of Bloomington budget, shaped by both a new state law and a new approach to municipal budgeting.

Two significant elements define this year’s proposal: the financial constraints introduced by Indiana’s Senate Enrolled Act 1 (SEA 1) and the City’s transition to a Priorities-Based Budgeting (PBB) framework and process. SEA 1 phases out critical local income taxes and limits access to short-term bonding for capital projects, requiring the City to reassess which services it delivers, how those services are funded, and what has the greatest impact.

When the Thomson administration took office last year, the City faced a $16 million operating deficit. The 2026 Proposed Budget includes $54,017,896 in revenue and $65,206,660 in expenditures, for a total general fund deficit of $11,188,770.

The General Fund is the City’s primary operating fund, supporting essential services such as public safety, administration, and public works. It differs from other funds that are legally restricted for specific purposes.

The total City budget is $147,150,078 across all funds, encompassing all departments, restricted funds, and capital projects.

“We cannot do more with less,” said Mayor Thomson. “What we can do is meet this moment with clarity, purpose, and a good dose of common sense. That means doing less with less, but doing it better. We are focusing on three principles: delivering core services, maintaining what we have built, and honoring the commitments made to our residents.

“Priorities are the throughline between our values and our actions. They help us decide, with both head and heart, where to place our limited time, energy, and taxpayer dollars. SEA 1 has changed the landscape for how cities like ours are funded. Even as the financial rules change, our commitments do not. We remain focused on co-creating with our community, leading with transparency and accountability, and building a city that not only works but also sparks joy. This budget reflects that north star.”

To support this shift, the City has begun implementing PBB. This multi-step process reorganizes spending by programs and aligns those programs with six priorities developed by the Administration and City Council:

• High-Performing Government
• Affordable Housing and Homelessness
• Economic Development
• Public Safety
• Community Health and Vitality
• Transportation

While full implementation of PBB is expected for the 2027 budget cycle, the 2026 proposal introduces a new structure that increases transparency and provides early insights into how programs map to community priorities. At this stage, program allocations by priority area are manually calculated estimates. As the City continues implementation with the Council and Controller’s Office, future updates will refine the level of detail, subgroups, and sorting of programs. This year’s budget book reflects a snapshot in time to support continued discussion and decision-making.

Budget presentations to the City Council will take place over two weeks. Week One begins on Monday, Aug. 18 with opening remarks from the Office of the Mayor, the Controller, Clerk, and Council, followed by presentations from Legal, Human Resources, Information Technology Services, and Public Works divisions, including Administration, Fleet, and Facilities.

Presentations continue on Wednesday, Aug. 20, with Housing and Neighborhood Development, Capital Improvement Board, Economic & Sustainable Development, Bloomington Fire Department, Bloomington Police Department, and Dispatch.

Week Two resumes on Monday, Aug. 25, with presentations from Community & Family Resources, Parks and Recreation, Utilities, and Public Works divisions, Sanitation and Animal Shelter.

The final presentations are Wednesday, Aug. 27, and conclude with Bloomington Transit, Planning, Engineering, and Public Works divisions' Street and Parking divisions.

Budget presentations are open to the public and available for livestreaming on catstv.net or Zoom. The Zoom links will be published on the City’s public meeting calendar at bton.in/7uecI.

The full 2026 budget proposal—including program inventories, priority-based memos, and departmental breakdowns—is available at bloomington.in.gov/budget.