While issues like Right to Work have dominated the headlines and the fight for mass transit hits close to home in Central Indiana, another important debate in the General Assembly has the potential to contribute to Indiana's economic competitiveness - local government reform.  As we've written about extensively here, CICP believes that streamlining local government - particularly the outdated layer of township offices - can lead to a leaner, more effective, 'customer-friendly' public sector to serve individual taxpayers and businesses.

Here is an excellent editorial from the Anderson Herald-Tribune describing the state of reform in this session of the legislature and calling for much-needed progress on the issue.

The story of downtown Indianapolis over the last 40 years is a narrative of self-determination, of a committed civic sector ambitious enough to believe they could make the mile-square into the vital heart of the region.

In the late ’60s, downtown was a hollowed-out core, under siege from more attractive suburban retail, with little business activity and just a few hundred hotel rooms. The area that is now IUPUI was acres of dilapidated neighborhoods and shuttered storefronts.

The city had one advantage—our corporate and community activists. In partnership with a string of strong mayors, they went about exploiting opportunities to build a vibrant downtown.

They used sports as a catalyst, luring the Pacers downtown, attracting the Colts and creating a prime destination for championship events. They supported the growth of the modern IUPUI campus and of White River State Park as an enormous urban renewal project. They also embraced a unique spirit of public-private partnership to bring investment of all kinds to the mile-square—corporate headquarters, Circle Centre mall, refurbished and new cultural attractions.

Today, we face a new challenge. Bill Hudnut famously proclaimed that Indianapolis couldn’t be a “donut city” with an empty downtown. Today, downtown thrives —the hole in the donut is solid. But now this core is constricted by a concentric circle of blight separating it from our robust suburbs.

While we were building up the downtown, Center Township overall lost 67 percent of its population.

The same energy and ingenuity that we devoted to building downtown must be applied to the surrounding neighborhoods, four to six miles outward. Failing to address their plight would pose a corrosive threat to the entire region. Here is a three-part prescription to start the rebuilding:

First, we must adopt an integrated strategy to reinvent promising urban neighborhoods into interesting places where people want to live. This means transforming housing, physical and social infrastructure, and creating neighborhood-serving commercial districts.

We have isolated examples of how this approach can work—the revitalization of Fall Creek Place, the effort underway in the Meadows led by Strategic Capital Partners, and the Near Eastside Legacy partnership between neighborhood groups and the Super Bowl Host Committee. The challenge is scaling up these best practices into a strategy that can be applied to other areas with the right mix of grassroots leadership and market activity.

Next, education. Failing schools are a primary reason for the flight of people and capital. We must reverse the status quo in urban education. The neighborhood schools of our future must educate current residents and attract new families to our urban core.

There are examples, in Indianapolis and nationally, of inner-city schools that are thriving. These great schools share common characteristics—school-level governance, leadership that embraces innovation and accountability. Our vision for rebuilding our urban core must set schools free to embrace this model and move urgently toward the creation of a broad portfolio of high-performing schools.

Mass transit is also a vital priority for rebuilding urban neighborhoods, giving residents the mobility to connect with jobs and their other daily needs. Dense residential and commercial development also grows along rail and bus rapid transit routes, attracting new people, investment and jobs.

The evolution of downtown took a generation, and this transformation will take the same long-term focus. Just as our sports strategy started with a few big wins that coalesced into a plan, we’re seeing progress in neighborhood redevelopment, education reform and transit planning.

Now is the time to harness this momentum and apply big thinking and sustained commitment to the tasks ahead. Decades ago we weren’t prepared to accept this city as a donut with downtown as the void in the middle. Looking forward, we have to broaden our focus to the next ring out by rebuilding and creating a truly prosperous region with a vibrant urban core.

The 2011 session of the Indiana General Assembly will likely be remembered best for the passage of far-reaching education reforms – more options for parents, the expansion of charter schools, and an emphasis on teacher quality and accountability. 

On a less positive note, however, local government reform again stalled at the Statehouse – another defeat for taxpayers and the cause of accountability at the expense of entrenched political interests.  Legislators refused to take any significant steps towards streamlining an outdated system of local government (designed during the Civil War-era) that includes a layer of township offices that provide services in an inefficient patchwork while making taxing-and-spending decisions largely outside of public scrutiny.

Proposals to eliminate township advisory boards (and providing for the complete elimination of township government by countywide referenda) were derailed by the vehement opposition of rural lawmakers and ultimately sidelined by the month-long legislative walkout. 

Two more modest bills passed both chambers but ultimately failed after conference committees.  HB1022, a proposal that curbed nepotism and conflicts of interest in local government offices, emerged from conference committee only to be rejected by the House of Representatives by a 31-64 vote.  SB526 focused on Marion County reforms, including the elimination of the county’s nine township advisory boards and transferring fiscal oversight to the City-County Council; the conference report passed the House but was defeated in the Senate by a narrow 24-26 margin.

The defeat of even these incremental reforms demonstrates the General Assembly’s continuing reluctance to disturb the status quo, which comprises a potent statewide network of local elected officials and patronage workers.  While some legislators may still believe the outdated trope that township government represents government ‘closest to the people,’ it has become clear to most (thanks to the tireless reporting of the Indianapolis Star and other media across the state) that these offices represent a drain on our tax base and an affront to transparency. 

Another member of our CICP Board of Directors, Collina Ventures’ Mark Hill, has penned a compelling piece on the need to reform local government – part of an ongoing editorial push on the part of the Indianapolis Star and a network of other Indiana newspapers to raise awareness of the need to streamline and consolidate the thousands of political offices that form a haphazard patchwork of bureaucracies across the state.

As someone who’s spent his career in the tech sector, Hill understands the power of technology to cut costs and enhance productivity.  A tech pundit once estimated that if progress in the rest of the economy matched progress in the computer sector, a Cadillac would cost $5.91, while ten minutes’ labor would buy a year’s worth of groceries.

Unfortunately, Indiana’s system of local government is anti-innovation – instead of becoming more efficient, it’s grown increasingly outdated and cumbersome.

Here is Hill’s op-ed:

Power of innovation can fix local government

Last week, the Indiana General Assembly convened at the statehouse to face the most daunting fiscal situation in a generation or more – a billion dollar deficit. 

But budget problems aren’t confined to the state level, and our lawmakers’ responsibilities don’t stop there either.  Across Indiana, local communities are dealing with the dual effects of the recession and property tax caps; Indianapolis alone faced a $50 million shortfall for its 2011 budget. 

The state legislature can help our cities and counties do more with less, by mustering the political courage to reform our broken system of local government. 

My career has been spent in the technology sector, a field that thrives on new ideas and change.  The power of high-tech innovation tends to cut costs and increase productivity.  My experience tells me that the big gains from technology actually come using the technology to change the process.

Unfortunately, our system of local government has not materially changed for more than a century-and-a-half; so instead of evolving to become more efficient and less costly, it’s done just the opposite.  It’s grown into a cumbersome and confusing maze of bureaucracy, notable for the quantity of political offices rather than the quality of public services provided.

An entire layer of government – the townships – exists to deliver services that could be more efficiently managed by counties.  And at the county level, too many elected officials perform purely administrative tasks – like coroner, recorder, or surveyor – that should have nothing to do with partisan politics. 

Township government is a perfect example of what’s wrong with the system.  The major responsibility of township trustees is delivering poor relief.  But there’s no common standard or procedure for doing so.  Half the townships report serving less than twenty households, and the average trustee spends eight times more in overhead to deliver every dollar in direct assistance than a typical private charity (using the United Way of Central Indiana as a baseline).  I know at United Way we work very hard to keep our overhead down so that we can deliver resources to those in need.

The situation cries out for change.  But the lack of visibility of these offices insulates them from public scrutiny – most township officials run unopposed in general elections, attracting little attention from the citizens they profess to serve. 

Township government should be abolished altogether, or at the very least have their budgets overseen and approved by county councils to bring some accountability to their taxing and spending decisions.  Counties should have the option to consolidate administrative offices and adopt a single executive form of government.

Defenders of the status quo have defeated these proposals during the last two legislative sessions.  But this year could be different.  Governor Daniels is a strong advocate of reform, and the new majority in the House of Representatives may be willing to put their belief in smaller government into action.

These changes represent their own kind of innovation, the kind of change that’s long-overdue for a system designed in an age of travel by horseback rather than broadband communications.

Hill, managing partner of Collina Ventures, chairs the Central Indiana Corporate Partnership's TechPoint technology and entrepreneurship initiative.

While tough times are forcing state and local government generally to find ways to do more with less, township government is apparently doing less with more.  Townships continue to overtax their way to huge surpluses, despite serving fewer disadvantaged Hoosiers.

A feature in the Indianapolis Star over the weekend demonstrates yet again the pressing need for reform of township government:  The Star reports that the state’s 1,008 townships are holding collective budget surpluses close to (or exceeding) $300 million, as of the end of 2009 (the latest data available). 

That represents an increase of nearly $90 million since 2007, despite providing direct emergency relief (their primary responsibility) to 92,000 fewer Hoosiers.

This startling news comes as state lawmakers begin to struggle with a billion dollar deficit, and as city and county governments across Indiana contemplate deep cuts in public services – laying off police and firefighters, closing parks, deferring roadwork and other infrastructure improvements.  The effects of the recession, as well as the implementation of property tax caps, are forcing the public sector to tighten its belt.

But in the townships, it’s business as usual.  Indiana taxpayers can’t afford to allow such an inefficient and antiquated status quo continue – the time for reform is now.

Click below for a helpful database from the Star on township surpluses and spending in Central Indiana:

Yesterday’s Evansville Courier & Press carries an interesting feature on city-county consolidation discussions that would merge Evansville – Indiana’s third-largest city – with Vanderburgh County – the state’s seventh most-populous county – in a ‘UniGov’-esque system.  A 12-member Evansville-Vanderburgh County Reorganization Committee was formed as a result of a petition drive led by the League of Women Voters of Southwestern Indiana.

The article acknowledges the political difficulties inherent in consolidation (this will be the fourth attempt since the mid-1970s to initiate local government merger in Evansville-Vanderburgh County), but emphasizes the potential payoffs in economic development and budgetary savings.

Such discussions are becoming more and more common around the state as communities grapple with the aftershocks of the economic recession coupled with the implementation of property tax caps limiting local revenues.  It’s become obvious to all but the most entrenched defenders of the status quo that local government reforms – like consolidation – are the only alternative to continued rounds of drastic budget cuts or local option tax increases.

Though the Evansville story doesn’t mention it, township government continues to be a prime target for reform efforts – the more than 1,000 townships across Indiana have overtaxed their way to hundreds of millions of dollars in unused surpluses as the fiscal crunch continues to plague city and county governments, while performing services that could be absorbed in county offices with greater efficiency and effectiveness.

Unfortunately, local government reform proposals based on the Kernan-Shepard Commission report have continued to stall before Indiana General Assembly (as chronicled ad nauseum on this blog), victim of political posturing and the furious lobbying of local officeholders defending their own fiefdoms.  The Central Indiana Corporate Partnership and our partners in the MySmartGov coalition remain committed to the cause of reform, and are prepared to push for progress again during the 2010 legislative session.

Francesca Jarosz’s feature in today’s Indianapolis Star ("Caps cut services along with taxes") details the budgetary struggles being faced by Indianapolis/Marion County as property tax caps place new limits on revenues, exacerbated by the lingering effects of the national recession.

Communities across Indiana are facing similar issues, as the ‘perfect storm’ created by the economic downturn and the implementation of the caps have left local governments hundreds of millions of dollars in the red.  It’s led to police and firefighter layoffs, roadwork deferred, hikes in local taxes and user fees, libraries and parks closed.  (The American Library Association says that Indiana reported more library branches closed last year than any other state.)  Cuts in public education have been well-chronicled.

However, it’s important that Indiana protect homeowners from skyrocketing property taxes, and ensure a fair and predictable tax system for business.  And economic downturns are inevitable – no economic strategy has yet conquered the business cycle.

The real culprit here is our stubborn resistance of local government reform, fixing a broken system that supports thousands of township governments, turns administrative offices into political fiefdoms and codifies a patchwork of overlapping bureaucracies that breeds inefficiency and ineffectiveness.  Until we are willing to restructure local government to allow it to do more with less, knee-jerk austerity measures or higher taxes are our only two options.

(Get a refresher on the common-sense government reforms recommended by the Kernan-Shepard Commission here.)

Today’s Indianapolis Star includes an interesting article on the latest antics from the world of township government – the Washington Township (Marion County) trustee racking up $20,000 in legal bills in a dispute over $758 in poor relief aid sought by a township resident for help with her rent and water bills.

Of the many troubling issues this story raises, two stand out.  First, the idea that these sorts of fiscally imprudent decisions are being made with little or no oversight by 1,008 separately-elected township officials is disheartening given the dire financial straits of state and local governments. 

Across Indiana, local officials are debating cuts in education, infrastructure, public safety and more.  Counties and municipalities are making tough choices.  Our legislature has made these choices even tougher by not stepping to the plate and making its own difficult political decision to reform local government, at least by demanding more oversight and streamlining of township offices.  And so we continue to be burdened by another layer of government bureaucracy that consumes and squanders tax dollars.

As to the circumstances of the Washington Township case itself, it’s difficult to argue the merits of either side on the basis of any statewide or even countywide guidelines.  That’s the second issue – there are no common rules for the provision of poor relief in Indiana.  Each township sets its own, leading to a patchwork approach that’s unfair and inefficient.  More than half the state’s townships provide relief to 20 households or less, and spend three dollars in overhead for every one that actually reaches a disadvantaged family.   It’s no surprise that disputes such as the one in Washington Township arise.

While the General Assembly again failed to take action on local government reform this session, more and more communities are exploring consolidation themselves out of financial necessity.  As these efforts multiply across the state and the fiscal climate continues to worsen, let’s hope that common sense reform – starting with township government – begins to gain more converts among lawmakers.

I hope you will take a moment to read the Indianapolis Star’s excellent editorial  on the fight for local government reform in the General Assembly.

The Central Indiana Corporate Partnership strongly supports reform.  Though the last legislative session was disappointing in its lack of progress on the broader Kernan-Shepard Commission recommendations, we have an opportunity this year to take at least a few small steps in the right direction  – focusing specifically on Indiana’s 1,008 township governments.

There are obvious ethics reforms that top this scaled-back agenda.  As lawmakers debate tougher ethics standards at the state level, they should also correct notable abuses among the townships.  It’s time to end nepotism in these offices, the widespread practice of hiring family members (often at exorbitant salaries).  (A review of public records show that two-thirds of township trustees share a last name with at least one person on their township payroll).  It’s also a clear conflict of interest to allow township employees to serve on the local legislative bodies that determine their budgets and salaries. 

As the state’s fiscal climate continues to worsen and county and municipal governments face a “one-two punch” from the recession and property tax caps, it’s also time for binding oversight of township budgets by county councils. 

Township governments spend more than $400 million a year statewide, and have over-taxed their way to more than $230 million in unused surpluses.  We’ve heard story after story of blatant waste, even fraud, in township finances.  At best, the system is inexcusably inefficient – for example, spending an average of eight times more in overhead than the typical private charity in Indiana to deliver every dollar of poor relief to the disadvantaged.

At a time when government at all levels must make tough choices, we can’t allow townships to continue taxing and spending unchecked.  Just as the Department of Local Government Finance approves county budgets, counties should oversee and approve township budgets.

We’re pleased that the Star continues to be a strong voice for reform, along with other media across the state.  With enough public attention and outcry from their taxpaying constituents, the General Assembly will move to reform a 19^th century system of local government to serve Hoosiers more effectively and efficiently today.

As lawmakers gather at the Statehouse for Organization Day today, we urge them to forge ahead with the critical issue of local government reform.  As legislators ponder the growing gap between government collections and spending, and consider whether to include property tax caps in the Indiana Constitution, they can’t continue to ignore the fundamental need for structural reforms that would allow local government to do more with less. 

During the last session, the General Assembly rejected the common-sense government reforms recommended by the bipartisan Kernan-Shepard Commission, changes that could have saved taxpayers up to $600 million statewide (according to studies by Ball State economists).  This session, legislators should at least push for increased openness, oversight and accountability to ensure that tax dollars are used efficiently and effectively during these tough times.  As state-level lobbying reform and other government ethics proposals are in the headlines, transparency in local government (especially the oft-overlooked township offices) shouldn’t fall by the wayside.

We couldn’t make the case any better than this editorial from Gary Reiter – this version appeared in the Indianapolis Star a few weeks back.

Times too tough to ignore township government

Gary Reiter

The recession has hit Hoosiers hard – we’ve seen it in our 401(K) statements, the family checkbook, the fortunes of the businesses that make up our economy.  Government isn’t immune; there’s been a lot of attention over the last two weeks to the state’s plummeting revenues, short more than $250 million over the last quarter.

But even closer to home, local government is facing the budget axe, too.  The recession and the property tax caps passed by the General Assembly last year are a one-two punch that have forced Indianapolis into cutting funding for parks, the arts, correctional facilities (raising the specter of early inmate releases) and other public services. 

During times like these, there can be no sacred cows.  As Governor Daniels recently said, everything has to be on the table – and that includes the operations and oversight of township government.

A few weeks ago, the Indianapolis City-County Council held a hearing on the financial practices of Marion County’s township offices.  I attended to learn more, and came away more convinced than ever that we desperately need reform.  Tough times demand an informed public, but when it comes to township officials, taxing and spending happens largely out of sight and out of mind.

I heard several troubling facts during the Council hearing that led me to do additional research:

Marion County township governments are hoarding more than $48 million in unused surpluses.  We’re being overtaxed, and townships are sitting on more than enough excess cash to plug the budget deficit for the entire county – instead of maintaining our parks, restoring arts programs and keeping criminals behind bars, we’re padding the bank accounts of township trustees. 

Washington Township, for one, holds a $5.4 million surplus, enough to operate for two years without taxing citizens another cent.  You may recall that the Washington Township advisory board voted itself a 69% raise last year.

In Franklin Township, the trustee’s office held a surplus of more than $5.5 million at the end of 2008.  Wayne Township has an amazing $12.7 million surplus!  Imagine if these funds could be spent on public safety, economic development or mass transit…or used to cut property taxes for homeowners.

The townships are also inefficient in administering the money they did spend.  In Center Township, less than half of spending related to poor relief went directly to those in need.  In Warren Township, the trustee’s office spent $12.20 in administrative expenses for every dollar dedicated to poor relief and fire protection.  In Washington Township, the figure was $9.44 in overhead for every dollar in services. 

It’s incredible that tens of millions of our tax dollars continue to be funneled through this largely-ignored layer of bureaucracy during a fiscal crisis, while the City-County Council has little authority except to hold hearings. 

It’s time to shine a light on township government.  It’s time to push for oversight and accountability, and a real public debate over whether townships have outlived their usefulness altogether in providing services that could be more efficiently and effectively provided at the county level. 

This debate starts with taxpayers getting informed and  speaking up – please don’t fail to make your voice heard.

Gary Reiter is the Chief Financial Officer of KERAMIDA Inc., a Global Environmental, Health, Safety, and Sustainability firm located in downtown Indianapolis and a resident of Center Township.

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.

From an interesting article by Mary Beth Schneider in Sunday’s Star about the political calculus behind local government reform – particularly the elimination of township government:

Steve Dillinger, one of three Hamilton County commissioners, said he and other county officials recently met with their legislators and laid out the stakes for them.

Lawmakers, he said, were told that if they eliminate a lot of township and county offices, the people who hold those jobs now might run for the legislators' jobs.

“The legislators may be giving themselves a whole lot of competition," Dillinger said.

It leads me to wonder – shouldn’t  lawmakers also be worried about challenges from pro-reform candidates?  And what about the general anger of voters who face service cuts and/or local tax increases to pay for outdated, inefficient layers of government?

Yesterday, there was even more bad news about Indiana’s fiscal plight, with state tax revenues falling $142 million below expectations for January.  As lawmakers struggle with the state’s budget in this climate, local officials face a daunting challenge as well: An estimated $400 million budget shortfall next year, as caps on property taxes are fully phased in.

In these tough economic times, it’s even harder to justify Indiana’s 1850’s-vintage government structure, featuring nearly 3,000 units of local government (including more than 2,000 with the power to levy taxes) and 10,000+ elected politicians.  This bloated structure means multiple layers of government and overlapping bureaucracies siphoning off tax dollars.

Take township government, with its collective operating budgets of approximately $400 million a year.  Imagine eliminating township offices altogether, as recommended by the Kernan-Shepard Commission.  It’s reasonable to assume county government could shoulder the duties of the townships (primarily poor relief and fire protection) for at least 25% less, by merging offices and consolidating budgets while at the same time maintaining and even improving services.

That’s $100 million a year that could help local governments face a looming budget gap.  The property tax caps passed by the General Assembly in 2008 are expected to hit some localities with significant revenue shortfalls in 2010, estimated at approximately $400 million statewide.  Reducing these anticipated deficits by 25% or more would help city and county governments avoid more dramatic cuts in services or local tax increases as they face the new reality of lower property tax revenues.

Indeed, consolidating township government would also free up significant surplus funds that could help localities in their transition to capped property taxes.  The state’s 1,008 townships hoard hundreds of millions of tax dollars they don’t even use, holding $230 million in cash balances (excluding cumulative funds) as well as millions more in unused assets like buildings and land).  That these surpluses are padding the coffers of township offices while dire budget forecasts are looming at the state and local levels is certainly a compelling argument for local government reform.

To look at one notable example: Marion County’s nine township governments held a collective fund balance of nearly $40 million at the end of 2007.  The property tax caps are expected to hit Marion County government to the tune of $63 million in 2010; tapping the township surplus would close two-thirds of this gap and allow Indianapolis to address critical priorities. 

In the private sector, tough times force successful companies to work smarter, to look for opportunities to cut waste without slashing budgets in ways that are counterproductive.  While state government can’t ever truly be ‘run like a business,’ the analogy certainly applies in this case:  As legislators debate budget priorities as revenues dwindle, it’s ludicrous to ignore the hundreds of millions of tax dollars being funneled into a patchwork of township governments that persist as relics of the Civil War era.

It’s hard to find a silver lining in our cloudy economic forecast.  But if one good thing comes out of this downturn, it could be that budget challenges finally force the General Assembly to do what should have been done decades ago – eliminate township government, pass the other reforms outlined by the Kernan-Shepard Commission, and allow local government to do more with less.

This is a topic I’ve been meaning to write about for a while now (I’ve been woefully behind on my blogging), and was finally prompted by this excellent column by Marilyn Schultz (Executive Director of MySmartGov.org) in today’s Inside Edge e-newsletter from Inside Indiana Business.

Earlier this month, voters across Indiana sent a clear message to the General Assembly – they demand reform of the state’s antiquated system of local government.  In 70% of the townships where the measure to consolidate township assessing duties into county government was on the ballot, Hoosiers spoke overwhelmingly in favor of government consolidation. 

These results clearly put momentum on our side as we work towards more sweeping adoption of the Kernan-Shepard government reform recommendations in 2009.  Election Day showed that Hoosiers “get it,” and expect local government that’s effective and efficient, delivering fair, consistent service to the taxpayers.  These outcomes weren’t about the township assessors themselves, many of whom are dedicated public servants doing their best within a broken system – as Marilyn writes, it’s about a broader appetite for reform that our legislators shouldn’t ignore.

During the heat of 2007’s mayoral election, it didn’t seem like Bart Peterson and Greg Ballard agreed on much.  But both are on record supporting local government reform generally, and the merger of township assessors specifically.  Mayor Ballard went as far as eliminating Marion County’s township assessors’ offices from his original budget proposal.  Former Mayor Peterson, who fought for government consolidation and efficiency throughout his tenure in office, penned an excellent op-ed in Sunday’s Star on the topic.

A bipartisan consensus continued to build around the common-sense recommendations of the Kernan-Shepard Commission.  To paraphrase Ronald Reagan, local government reform isn’t a matter of right or left, but right and wrong.

Among the many causes of the current economic crisis – and there’s plenty of blame to go around – is a lack of transparency and accountability in the markets.  Investors didn’t have the tools to properly evaluate the liabilities posed by sub-prime mortgage holdings and other complicated financial instruments, and financial institutions were encouraged to accumulate more and more risk.  Once the breadth of the problem became more clear, the resulting loss of confidence only accelerated the market’s decline.

I’d say the same can be true of government.  Without transparency, there’s no real accountability – voters can’t make informed decisions.

It’s another reason we need local government reform.  Our current multi-layered system doesn’t bring government closer to the people – it only serves to obscure and confuse.  Here in Marion County, we have more than 60 units of government, well over  a hundred elected officials and dozens of special districts with taxing power.  Statewide, Hoosiers are confronted by 3,000 units of local government, 10,000 elected politicians, and 2,700 special taxing authorities.

So when voters ask, “Who’s responsible for my tax bill?  Who’s in charge of public safety?  What are the standards for assessing my property?,” there’s no clear answer.  This lack of clarity leads to the same sort of excesses we’ve seen on Wall Street – local government spending has more than tripled over the last twenty years, growing at more than twice the rate of inflation.  Along with the inconsistent performance of Indiana’s 1,000+ township assessors, this is the culprit for unfair property tax bills.

I’ll close with a quote:  “The only effective check on bad government is public opinion, and therefore responsibility for government success or failure should be fixed and not diffused, so that the electors may deal intelligently with a clear cut issue.”

These words are as true today as when they were written – in 1935, from the report of the Indiana State Committee on Governmental Economy to Governor Paul V. McNutt.  Local government reform is long overdue, and it starts with transparency and accountability.  Voter can start this fall by eliminating the remaining township assessors, and encouraging their legislators to consolidate the rest of township government and administrative county offices during the next session of the General Assembly.

Excellent piece by Charlie Garcia in yesterday’s Star lamenting the reinsertion of funding for Marion County’s eight township assessors by the City-County Council.  Now it’s up to the voters to move towards greater consistency, professionalism and fairness in property tax assessments, as a prelude to more progressive government reforms.

CICP Board member David Shane does a great job in today’s Star of describing the stakes of this fall’s referenda to eliminate the last of the township assessors, merging their duties into the county assessors’ offices:

“If the referenda fail, on the other hand, it would be a victory for the status quo, for more costly, less efficient government that provides inconsistent and often unfair outcomes. In Marion County, it would mean that taxpayers will keep paying for eight government offices to do a job that could be done better by one. And it would send a message to state legislators that voters don't care about reform, stalling action on other recommendations to make local government better, more efficient and less expensive.”

It’s estimated that the township-based assessment system created a 25% error rate statewide, contributing to last summer’s property tax crisis.  The referenda give the voters a chance to make their voice heard on this issue, and opens the door for broader reforms – and more efficient, effective government for Hoosier taxpayers.

Mayor Greg Ballard is a strong proponent of local government consolidation, for good reason.  Mayors of both parties have recognized the waste and inefficiency that come with too many layers of government with overlapping responsibilities – starting with the townships offices, those vestiges of an 1850s-era system.  And politically, Indianapolis mayors are often held accountable for the overall fiscal health of the county, when in fact dozens of smaller government units and independent authorities have their own taxing and spending power.  It’s a recipe for skyrocketing property taxes and budget meltdowns.

In his 2009 budget, Mayor Ballard offers a glimpse of what could be – he builds in a savings of $3 million from the consolidation of eight township assessors’ offices into the county assessor, a measure that’s on the ballot as a referendum this fall.  In the wake of the property tax mess and costly reassessment debacle of 2007, the administration is challenging the voters to help fix the system.  Along with more consistent service, a positive outcome of all the township referenda would deliver an estimated 30% reduction in the cost of assessment, according to the Mayor’s Office.

We applaud the Mayor’s stand.  We need to seize every opportunity to consolidate government and deliver services more efficiently.  If voters support merging the remaining township assessors into county governments across the state, it will build pressure on the legislature to enact more sweeping local government reforms next year.

But the opposition from entrenched political interests will be fierce – thousands of local officials have a stake in the status quo, and will fight to preserve the benefits and perks they’ve built through the years.  With the first Ballard budget, the battle is joined.

(And Mayor - get well soon.)