In its first meeting of 2026, the Gary Common Council saw shake ups in its leadership and heard a presentation detailing the city’s economic outlook, especially after legislative changes last year.
Councilwoman Linda Barnes Caldwell, D-5th, was elected president in a 5-4 vote Tuesday night. Council members Mary Brown, D-3rd; Barnes Caldwell; Darren Washington, D-at large; Kenneth Whisenton, D-at large; and Dwight Williams, D-6th, all voted for the former parliamentarian.
“I would like to take the opportunity to thank my colleagues for supporting me as president for 2026,” Barnes Caldwell said during Tuesday’s meeting. “I plan to make you proud.”
Councilwoman Lori Latham, D-1st, also received votes from herself and council members Dwight Halliburton, D-2nd; Marian Ivey, D-4th; Myles Tolliver, D-at large. Latham previously led the council, taking over in February after a Democratic party caucus chose former President Tai Adkins to serve as Calumet Township trustee.
Latham also served as vice president, and no one filled the position after she took over as president.
Washington was elected vice president Tuesday night, receiving votes from himself, Barnes Caldwell, Brown, Whisenton and Williams. Tolliver was also nominated and received votes from himself, Halliburton, Ivey and Latham.
“I also want to thank my colleagues for electing me vice president, but I also personally want to say thank you to Councilwoman Lori Latham,” Washington said. “You stepped in, became our president and led our council, and for that, I want to say thank you. … Thank you for stepping in and taking the bull by the horns.”
Whisenton is the council’s new parliamentarian, taking over the position from Barnes Caldwell.
Following the reorganization, Latham introduced representatives from Baker Tilly Municipal Advisors, a financial advisory firm, who presented a city economic model overview.
“At the beginning of last year or maybe even the year before that, we established an idea that for the legacy of the council, we wanted to leave the city in a better financial situation than we found it in,” Latham said.
Baker Tilly’s presentation looked at Gary’s historical financial situation, including the city’s tax rates and how much of its budgeted money is disbursed. The firm also gave recommendations for the city’s financial future.
“We do not take our engagements lightly, and this is the first significant engagement we’ve had with the city,” said Andre Riley, principal at Baker Tilly.
In the presentation, Baker Tilly found that the city’s local income tax increased steadily between 2021 and 2025, growing about 23%. The firm also found that the city spent $15 million less annually than what was budgeted in 2022, 2023 and 2024.
City tax rates decreased between 2021 and 2025, but Gary’s net assessed property values increased by 41% between 2021 and 2026, according to Baker Tilly.
Eric Walsh, principal and municipal advisor for Baker Tilly, presented estimated fund results for the city, with estimates from 2025 to 2029. Walsh expects the general fund to continue growing through 2029.
Senate Enrolled Act 1 will impact the city and other Indiana communities, Walsh said, and all existing local income tax rates will expire on Dec. 31, 2027. If the city implements a 1.2% tax rate in 2027, Baker Tilly estimates that the local income tax impact would be neutral.
Public safety and CEDIT funds will end in 2028 because of SEA 1, Walsh said, and the council will have the option to pass the municipal income tax.
Washington previously told the Post-Tribune that he was concerned the legislation could have unprecedented consequences for Gary, and he was worried that the city would have to implement a local income tax on top of Lake County’s tax to fund its resources.
The majority of Gary’s tax dollars come from homeowners, according to Post-Tribune archives, and the city doesn’t have enough money to make up for the property tax relief, Washington said.
Baker Tilly encourages the Gary Common Council to consider the potential budget impacts of SEA 1 before making decisions, including adding a municipal local income tax in 2027. The firm also encourages the council to look for other revenue replacements within the city.
House Enrolled Act 1448 went into effect during the session for the 2026 budget, according to Post-Tribune archives, which requires Gary to pay more than $12 million to East Chicago and Michigan City after a state comptroller mistake that was supposed to address the financial burden after the move of Majestic Star casinos.
Gary owes more than $6.4 million to East Chicago and more than $5.7 million to Michigan City, and payments will start this year. Money will be deducted from state comptroller funds and money appropriated by the Indiana General Assembly, and funds will be withheld for 10 years.
House Enrolled Act 1448 was not included in Baker Tilly’s presentation.
mwilkins@chicagotribune.com