Local governments across the state cut expenditures and tightened their belts in response to the recession and due to Indiana's tax caps, so operating margins are now razor thin.
"One flood, one serious episode we are asked to respond to and we are done for," said City of Highland Clerk/Treasurer Michael Griffin.
Local government capacity nationwide was cut by 16.6 percent during the recession, as budgets were slashed and staff laid off, Griffin said.
That's why federal budget cuts and talk of ending the personal property tax in Indiana are so scary to localities that are just beginning to turn their budgets back into the black.
"As I remind people in the private sector, when the economic cycle turns down you can gear down," Griffin said. "That's not the same for us."
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