South Bend is dealing with a punishing budget shortfall.

The City of South Bend is cutting about $800,000 from its proposed 2025 budget after a significant deficit project was found. City departments and the city council have worked diligently over the past few weeks to trim away the budget.

Agencies across the state and country have been dealing with similar situations to South Bend. In neighboring Lewis County, the City of Centralia has a projected deficit of $1.2 million for 2025.

So far, the only major hit to South Bend has been one layoff inside the South Bend Police Department in a position that was budgeted mid-year. Police chief Lucas Stigall and city officials, as well as the officer, knew that the position would teeter on the budget outlook.

Officials in South Bend first realized the extent of the budget shortfall around the Oct. 14 city council meeting. Mayor Julie Struck held off on formally taking up the issue until an Oct. 24 budget workshop.

The only other position impacted by budget trimming is a full-time parks position, which was moved back to the public works department. One of the other employees will likely absorb the duties.

Struck was one of the first, along with clerk/treasurer Zoe Sowa, to discover how bad the city’s outlook was in 2025 after generating a summary of the cash funds report. The report hit her like a brick, and she has “hardly slept” since seeing it.

“I was staggered at where we were for the budget going forward,” Struck said. “It was overwhelming, and I had prayed that I had made a mistake, you know, I was just figuring this thing out, and I had prayed I had made a mistake.”

Struck and department heads have been able to cut $650,000 from the budget and still needed to cut another $175,000 as of the Oct. 24 workshop. As of Nov. 4, the city has cut the proposed deficit down to $80,000 and is still combing through the proposed budget for more areas to trim.

“I think we got a plan to figure out that $80,000, and so, we will have a budget,” Struck said. “We haven’t done it yet; it still has to go to [the] council. I think we will make it through next year, and then we will take a look at it again.”

Widespread issue

The situation in South Bend is an issue unfolding for many municipalities and government agencies. Tax revenue is not increasing, while expenses are rising. The cost of materials, such as asphalt, have gone up exponentially.

“I was in an Association of Washington Counties meeting last week, and there was, I don’t know how many cities there were, 15 maybe cities were there,” Struck said. “And they asked how many of you are struggling with your current expense fund, and almost every hand in the room went up in the room except AWC staff. Everyone is having a hard time.”

“Wish lists are gone,” Struck said about the impact on departments within the city.

For the police department, Stigall and the city are hopeful that the position that has been laid off can be reinstated. They are considering how the position can be budgeted and what grants may be available.

“Unfortunately, financially, we are unable to sustain that full-time position,” Stigall said. “I plan on working with the councilors and other city leaders on a plan to look at different ways to better fund current expenses so that we may be able to expand the police department and provide better services.”

“We are hoping we have a plan moving forward. Hopefully, it can put us back on track. The last two years have hurt with declining revenues,” Stigall added. Besides the chief position, the department has one sergeant, two full-time positions and a reserve officer.