Legislature and Township Government and Legislation and Government & Economic Development and Government Reform

Aggressive bills aimed at consolidating township governments fail

April 16, 2011

Advocates of government consolidation, including Gov. Mitch Daniels, began the legislative session with high hopes and strong momentum to drastically reform local government.

But with two weeks left in the session, only two statewide local-government bills remain. Both fail to accomplish reformers’ key aim: removing layers of township government they say have outlived their use.

Hinkle Rep. Phil Hinkle has pushed for township reform in the Indiana House.

A third reform bill still in play would go further, removing township boards and putting most township duties under the purview of county government. But it would apply only to Marion County.

Several aggressive reform bills introduced this session would have applied statewide. But they have either failed or died, and the chances that their language will appear in still-existing bills are slim to none.

It’s a blow to the pro-reform camp, whose members say the remaining statewide bills, which address government nepotism and township transparency and efficiency, provide minuscule changes with little meaning.

“It may make legislators feel good, like they’ve passed local government reform,” said Mark Lawrance, senior vice president with the Indiana Chamber of Commerce, who lobbies on government-reform issues. “But a lot of it is window dressing.”

Bank Sen. Jim Banks says township government “works pretty well” in his district.

Township proponents, however, also aren’t yet claiming victory.

The two statewide bills include many of the reforms the Indiana Township Association pushed for this session, but they also contain provisions that cause concern. Chief among them is allowing county fiscal bodies to have oversight of township budgets. Township advocates are pushing for the Senate to pass an amendment that would strike that provision.

They’re also worried about the Marion County reform bill, which they say could set an example for other counties in the state to nix township boards.

Two lawmakers have drafted amendments to that bill that would let voters decide by referendum in November 2011 whether to eliminate township government. As of press time, it was not clear whether those amendments would be added to the bill.

“It’s precedent-setting,” said Debbie Driskell, the township association’s executive director. “[And] we just don’t think it’s good government.”

Optimism, then disappointment

By comparison, though, Driskell’s concerns were much greater late last year, before the session began, and sweeping reforms seemed poised for success.

Daniels had made it clear that reforming local government was among his legislative priorities. He discussed it frequently in public appearances after the November election that brought more of his fellow Republicans into the Legislature, putting him in a stronger position to carry out his agenda.

reform factboxSome observers also predicted that financial pressures facing local government—reinforced by property-tax caps cemented into the constitution in last fall’s election—would help propel the issue.

A statistical model run by economists at Ball State University estimated $470 million in annual statewide savings from a gamut of reforms proposed as part of the Kernan-Shepard government streamlining report in 2007. About 90 percent of that would come from abolishing township government.

But reform critics argue townships’ piece of the tax pie is small, making up just 4 cents on the dollar collected in property taxes in 2009, the most recent available year.

Disagreements on such issues were among the factors that hampered some of this year’s proposed reforms.

House and Senate lawmakers introduced seven bills to tackle the local government question. Most called for doing away with township boards.

Those boards set the budgets for township trustees, who are elected to administer township assistance programs for low-income residents, maintain cemeteries and parks, and provide fire service in unincorporated areas of the township.

Some also would have required a question to appear on the November 2012 general election ballot, allowing voters to decide whether to abolish the position of township trustee and the few township assessors who remain. In instances where those offices were eliminated, the duties would have shifted to the county executive or county assessor.

Two of those bills in the Indiana House passed their committees with bipartisan support. But just before they were to be introduced in the full House, Indiana Democrats left the state in protest of several education and labor bills. When Democrats returned, the reform bills were among 23 that effectively died for lack of an introduction.

And while township government wasn’t a sticking point in the Democrats’ walkout, the agreement that brought them back stipulated that none of the 23 bills would be resurrected.

“Had we had the opportunity to bring those out of the House, the outcome may have been different,” said Rep. Phil Hinkle, an Indianapolis Republican who leads the House’s government and regulatory reform committee.

But Minority Leader Pat Bauer, D-South Bend, disagrees that those bills would have had strong Republican support.

He noted last year’s foiled attempt to pass a bill sponsored by Democratic Rep. Bill Crawford, then a member of the majority party, to have a statewide referendum allowing voters to decide whether to eliminate township government. At the time, Republicans instead preferred a bill that would eliminate township boards.

This year, though, several Senate Republicans opposed a measure that would eliminate such boards.

A Senate bill containing that provision failed to pass, with all 13 Democrats voting against it and nine Republicans opposing it. Bills with similar language passed the Senate the last two years but died in the House.

The change in direction was partly driven by newly elected senators such as Jim Banks, who represents a mostly rural district that includes Whitley County.

He said he’s not convinced the effort would produce meaningful taxpayer savings. But his bigger concern is, he sees consolidation creating a more powerful form of government that’s further removed from the people.

“In my district, township government works pretty well,” Banks said. “There are certain issues [with it], but I’m one of many legislators who don’t want to throw the baby out with the bath water, which is what this legislation attempts to do.”

Future prospects

Some observers say the statewide legislation that still has a chance wouldn’t produce much in the way of taxpayer savings.

It would, however, provide more transparency in township government, which has been criticized for operating under the radar and stashing too much in reserves.

The legislation includes provisions requiring the state to prepare an annual report with information about township budgets and reserves; requiring township board meetings to be held in public places; and publishing addresses of township offices in local phone books.

Salaries of township board members also would be capped, as would the township budget appropriations.

Aaron Smith, who heads the taxpayer-advocacy group Watchdog Indiana, sees benefits in the bill.

“What’s left are really things that will increase the professionalism and consistency of service delivery,” Smith said.

In the more aggressive Marion County bill, Indianapolis had pushed to consolidate the three remaining township fire departments into the Indianapolis Fire Department, a move city leaders believe would have produced savings. But that provision was removed.

An audit showed spending growth for the five township departments that have consolidated in Marion County was half that of the three that have not consolidated from 2006 to 2010.

Even in the absence of that provision, though, county oversight of townships—including approval of budgets and control of fund balances—could eventually translate into taxpayer savings.

“Our model means townships are part of the process of county government,” said Chris Cotterill, Mayor Greg Ballard’s chief of staff. “It’s bringing it up so that transparency can be achieved.”

It’s still unclear, though, whether Marion County’s measure, if passed, would encourage lawmakers to take up similar statewide reforms again in coming years.

Jane Jankowski, a spokeswoman for Daniels, refused to comment on whether local government reform would be among the governor’s priorities next year.

But some say this year’s example has shown that it will take more than political leadership or financial pressure to sway lawmakers in the direction of reform. It will require overcoming the public indifference that many say exists about the issue.

“I don’t see much hope for significant local government reform if citizens don’t insist the decision be put in their hands by referendum,” Smith said. “And as long as citizens are apathetic, lawmakers aren’t hearing from everyday citizens to let us decide.”•

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