CICP News & Updates

Indianapolis homeowners got some good news this week, as the Indianapolis Star reported that the second installment of Marion County’s 2008 property tax bills should be slightly less than the first – and significantly lower than 2007.  We can thank the property tax caps proposed by Governor Daniels and passed by the legislature last year for this relief…

But for every action, there’s an equal and opposite reaction – this law of physics also applies to lawmaking.  As property taxes go down, so do revenues for local governments.  Already, communities like Muncie have announced fire station closings and firefighter layoffs as they struggle with growing budget gaps; Indianapolis stands to lose $21 million when the caps are fully phased in next year (that’s enough to pay for more than 220 new IMPD officers with vehicles and full equipment, to put it into perspective).

It didn’t have to come to this.  During the last legislative session, the General Assembly had an opportunity to enact sweeping local government reforms – eliminating outdated, inefficient township governments and consolidating administrative county offices under an elected county executive and council.  These moves would have helped local governments do more with less, and avoid budget meltdowns.  I’ve talked about these reforms ad nauseum here and elsewhere, but the topic is worthy of more commentary – we need reminding again and again about those legislators who turned their backs on reform, killed the Kernan-Shepard recommendations and abandoned cities and towns to struggle with growing deficits.

Here’s the math at the highest level.  The property tax caps are expected to cost local governments a collective $400 million in 2010.  An analysis conducted by the Ball State Bureau of Business and Economic Research estimates that $600 million could be saved by implementing all of the Kernan-Shepard reforms.

At the township level, it’s simple common sense.  There’s little accountability in this relic of Civil War-era bureaucracy:  Around 70% of township trustees and advisory board members run unopposed, and get elected by less than 15% of the population they serve.  More than half of Indiana’s township provide poor relief (their major responsibility) to 20 households or less.  There’s little question that county governments could absorb these duties more efficiently. 

Townships across the state are also currently hoarding more than $230 million in unused surplus funds – money that could help communities avoid tax increases or budget cuts as they adapt to the dire fiscal realities.

At the county level, accountability is also the issue.  County government is fragmented into a host of administrative offices, operating with little public oversight.  These aren’t policymaking roles – ask yourself if there’s really a Republican or Democratic way to file a marriage license or record a deed.  Consolidating these offices under a single county executive and an expanded county council would provide a simpler system with checks and balances – just like the President and Congress, or the Governor and the General Assembly.

These reforms would make local government more transparent and accountable, less costly and more efficient.  But the status quo is protected by entrenched interests, thousands of local politicians who get jobs and support from the current system.

During the last session, the status quo won.  But the problem isn’t going away – and the campaign for local government reform isn’t either.  We’ll be back, for the next legislative session and beyond, fighting for the taxpayers to overhaul a 19^th century system of government that’s given birth to 21^st century cronyism.