Indiana House panel OKs local government consolidation measure

INDIANAPOLIS – An Indiana House panel voted 13-0 Thursday in support of a measure offering financial incentives to local governments that voluntarily find efficiencies through consolidation.

Senate Bill 26, authored by State Sen. Randy Head, R-Logansport, would allow local governments to retain parts of their levies and budgets that would otherwise be reduced because of government reorganizations.

Head said the House Committee on Government and Regulatory Reform’s favorable vote sends the legislation to the full House of Representatives for further consideration.

“I believe this legislation’s financial incentives will help motivate local governments to find efficiencies and cut costs by providing financial incentives,” Head said. “This could be a win-win situation for local units and taxpayers.”

Head said his legislation allows, but does not require, local units to merge departments or functions.

Under Head’s proposal, local governments could keep up to 50 percent of any savings the first year after a merger. The amount would be phased down to 10 percent after four years and continue at that rate.

Senate Bill 26 charges the Department of Local Government Finance with determining how much savings would be realized by a merger and how much money local governments would retain.