Indiana township government: 'It's an anomaly; it's wasteful'

The township’s elected three-member advisory board skipped a public hearing on the office’s 2019 budget because board members were certain that no one would attend, according to township Trustee Mike Bramel.

They were right. No resident showed up for the scheduled meeting to discuss how to manage the township spending plan financed by local property taxes.

Bramel found his duties so undemanding he was out of the office for more than two consecutive months beginning in February.

Boone Township is not an oddity. An investigation by CNHI News Indiana shows that Indiana’s township system of local government operates across the state in the shadow of public knowledge of its duties and responsibilities.

While one of the primary responsibilities of Indiana townships is to provide assistance to the poor, Boone had only one such recipient -- of $168 for a utility bill -- in all of 2017.

That year, the township had tax revenues and receipts of about $89,000.

Boone is one of 1,005 townships in Indiana. Each has an elected trustee and an elected three-person board that's required by law to meet quarterly.

According to the Indiana Department of Local Government Finance. Indiana's townships will draw $389 million in tax revenue this year, 11 years after a state commission on government efficiency and effectiveness called for the township level of government to be abolished.

The cost of township government has risen dramatically over the past 35 years, from $63.8 million in 1984, to $219.7 million in 2005, to $389 million this year. Adjusting for inflation, the cost of township government has increased 151 percent since 1984 and 36 percent since 2005.

SURVEYS FIND SHORTCOMINGS

Over the past year, journalists working for 13 CNHI Indiana newspapers visited 94 township trustees' offices. Many of the trustees were difficult to contact and unresponsive to requests for minutes of meetings and other official documents.

Among the findings:

• 59 of the 94 offices studied had neither a website nor a Facebook page;
• 24 did not provide an application form for poor relief, as required by state law;
• 33 did not provide minutes from the most recent township board meeting.

In addition to visiting trustees' offices, CNHI enlisted a professional polling company, Issues & Answers, for an online survey of more than 500 Hoosiers to learn about their knowledge of and engagement with township government.

Among the findings:

• 82 percent either didn't know or were uncertain of the name of their township trustee;
• 73 percent were unaware that townships provide poor relief;
• 62 percent said they had not used township services in the past year.

Appointed by then-Gov. Mitch Daniels and led by former Indiana Chief Justice Randall Shepard and former Gov. Joseph Kernan, the Indiana Commission on Local Government Reform in 2007 offered 27 recommendations aimed at improving the efficiency of local government.

One of the recommendations was to fold township responsibilities into county government.

"Indiana has too many local governments ..." the report begins. "Because local government dollars are diluted and dispersed into so many layers controlled by so many players, they are not always spent efficiently."

The Kernan-Shepard report said townships were antiquated, lacked oversight and were prone to nepotism, among other findings.

More than a decade after the report was issued, Shepard offers a simple rationale for the recommendation to abolish townships.

“I finally concluded that in terms of the best use of people’s tax dollars that was the only long-term answer,” he said.

TOWNSHIPS MOSTLY UNCHANGED

Though trustees have wide latitude in how they spend tax revenue, townships have three major responsibilities: distributing poor relief, providing fire protection in areas not covered by municipal fire departments and maintaining pioneer cemeteries.

Since the Kernan-Shepard report was issued in 2007, property tax assessment responsibilities have been moved from townships to Indiana's 92 counties, a change that's generally praised by state leaders and by assessors. Otherwise, township government across the state has remained almost entirely intact.

Hoosiers pay property tax rates on average between 5.5 and 8.5 cents per $100 of assessed property value for their townships to operate, meaning the owner of a $100,000 home would pay from $55 to $85 a year. Whether their property is in a town, a city or a rural area, owners pay township taxes.

The Indiana Chamber of Commerce has long pushed for abolishing townships and handing their responsibilities to other units of government.

Told that more than three in 10 trustees surveyed by CNHI newspapers could not provide an application for poor relief, chamber President Kevin Brinegar said, "That's an example of the inherent problem of having 1,005 of these people mostly flying below the radar screen."

Brinegar noted a previous chamber study showing townships hoarded more than $200 million in reserve funds that could go into other services or provide taxpayer relief. Actually, Indiana's townships had a cash balance of more than twice that amount -- $454 million -- at the end of fiscal year 2017.

"If we were starting with a blank slate, we wouldn't do it this way," Brinegar said of a township system that dates to the 1850s. "It's an anomaly with other states around the country. It's wasteful."

Michael Hicks, director of the Center for Business and Economic Research at Ball State University, echoes Brinegar. The two have worked together on township reform.

"The existence of the township hasn’t been really an appropriate way of delivering public services for poor relief for half a century and fire protection for 40 years probably," Hicks said.

RIPE FOR ABUSE? 

Because trustees and their elected boards can operate the offices with little state supervision, critics say the township form of government is ripe for abuse of taxpayer funds.

Since 2010, auditors with the State Board of Accounts have flagged 78 such issues in a total of 1,996 township audits. Auditors found questionable spending of about $1.9 million.

Many of the audits recommended improved administrative functions, but the more serious cases resulted in 18 criminal prosecutions for such charges as theft and official misconduct and 21 civil lawsuits mostly from the Indiana Attorney General's office.

Brinegar contends that the township system fosters a higher rate of misbehavior than other forms of government in Indiana.

"It's still troublesome each time one of these folks gets arrested and goes to jail," he said. "I don't see that happening nearly to that extent in county government or state government, but it sure happens regularly with township government."

Of the 561 Hoosiers polled in the June online survey, 71 percent either agreed or strongly agreed with the Kernan-Shepard commission's recommendation that township services be transferred to county agencies. The respondents live in 80 of Indiana's 92 counties.

Proponents say township government is important because it's close to people who might not have personal transportation and might not be able to afford internet service.

Debbie Driskell, executive director of the Indiana Township Association and trustee of Delaware Township in Hamilton County, said those calling for the dismantling of township government might not understand its functions.

"If I have the opportunity to sit down with them one on one, I would say eight or nine times out of 10 they change their way of thinking when they understand what we do and why certain services cannot be delivered by a different level of government," Driskell said.

REFORM EFFORTS STALL

The township association has staved off legislation to consolidate township services in every session of the Indiana General Assembly since 2008. But the association did support a bill earlier this year that called for small townships to be consolidated for better efficiency.

Authored by State Rep. Cindy Ziemke, a Republican from Batesville, the bill would have required townships with populations under 1,200 to merge with a neighboring township.

The bill died after challenges by the Indiana Farm Bureau, which led a legislative call-in from trustees and rural residents, and the Indiana Volunteer Firefighters Association, which said there was no evidence the consolidations would save tax dollars.

The president of Indiana Farm Bureau is Randy Kron, who has served 28 years as Armstrong Township trustee in Vanderburgh County.

His township recently joined a fire territory, increasing property tax rates and leading to better medical services, Kron said. He's opposed to legislatively mandated township consolidation.

"Government closest to the people is most effective," he said. "There’s got to be a lot of work done and a lot of thought into this before you would ever move down that path. You can’t force it. It’s got to be mutually agreed upon between the two parties if they do it.”

In earlier years, Ziemke received push-back when she proposed abolishing townships. She's still looking for political solutions to make the form of government more effective.

"It's just breaking through that old thinking and breaking through the political side of this," she said of the townships impasse. "It's politics that's doing this, and that is wrong."