ELKHART, IND. (WOWO) Elkhart City Council has approved the city’s 2026 budget, reducing spending by nearly $7 million compared to this year. The budget passed Thursday night in an 8-1 vote, with leaders emphasizing a focus on essential services while preparing for significant state tax changes ahead.

The reductions are aimed at cushioning the impact of Senate Enrolled Act 1, signed into law in April, which will gradually change property taxes over the next two years and local income taxes by 2028. City officials say Elkhart could lose an estimated $40 million in funding by 2028 — roughly one-third of its operating budget.

This year alone, the city trimmed $6.7 million in spending as part of its early adjustment strategy. Leaders said the belt-tightening will help maintain financial stability as the city adapts to the new tax structure.