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March 13, 2012

Slow progress on efforts to reform local government

INDIANAPOLIS — Getting property tax bills out on time may not seem like a headline-grabber, but for supporters of a sweeping government reform effort, it’s big news.

Four years ago, not a single county in Indiana hit the deadline for sending out tax bills that generate revenues needed to keep the gears of local government moving. The following year, only two did.

Last year, 90 of Indiana’s 92 counties made the deadline.

The difference has saved cities and schools millions in interest payments on tax anticipation loans while waiting for their counties to collect and hand over tax dollars.

State finance officials credit the dollars saved to a recommendation made in December 2007 by the Indiana Commission on Local Government Reform.  

The bipartisan commission spent months coming up with a road map to streamline local government. In a report that called for sweeping changes, it issued 27 recommendations — including the one that led to the consolidation of township assessors under the county and a shift to more professional assessment standards.

But only about one-third of those 27 recommendations have come to fruition since.

That’s not enough for Gov. Mitch Daniels, who created the commission. Talking to reporters Monday — just two days after the Indiana General Assembly closed Daniels’ last legislative session — the governor bemoaned the fact that much of the bipartisan commission’s recommendations have met a bipartisan wall in the Legislature.

“I continue to be disappointed that we didn’t get more than one-third done,” Daniels said.

That’s not how one of the men who headed the commission’s work sees it, though.

Retiring Indiana Supreme Court Chief Justice Randall Shepard is the Republican who co-chaired what became known as the “Kernan-Shepard commission” with former Gov. Joe Kernan, a Democrat.

He thinks progress on local government reform has been impressive, given the resistance to change a system put largely in place before Indiana became a state.

Shepard recalls a conversation with commission members just as they were getting ready to release the 2007 report that called for virtually eliminating township government while consolidating hundreds of school and library districts and imposing new rules for financial accountability.

One member said it would be a “miracle” if everything in the report got done. Shepard said the response from another commission member was: “‘It’ll be a miracle if anything gets done.’”

So in Shepard’s estimation, getting one-third done “is a pretty good outcome.”  

In the session that just ended, lawmakers passed a bill with roots in the Kernan-Shepard recommendations: Aimed at eliminating conflicts of interest and reducing nepotism in local government, it bars a local government employee from taking office as an elected official of the government he or she works for. It also bans a local government employee from supervising a relative in a local government job.

Similar legislation failed in past sessions.

Many of the recommendations made by the Kernan-Shepard commission in its 2007 “Streamlining Local Government” report have been met with resistance by local officials.  

The report, subtitled “We’ve Got to Stop Governing Like This,” was based on the commission’s belief that there was too much local government and too little accountability for how local officials were spending taxpayer dollars.

It detailed Indiana’s cornucopia of local government units: almost 3,000 cities, towns, counties, townships and school corporations. And nearly 11,000 local officials to oversee it all. It found that only nine states had more local government than Indiana.

State Rep. Mike Karickhoff, one of 19 freshman Republicans in the House, won his seat in 2010 after he was critical of his opponent’s efforts to help House Democrats block the Kernan-Shepard reforms.

Karickhoff said the Kernan-Shepard recommendations are worthy of more effort by the Legislature, but he’s not a wholesale believer in the reforms.

He said efforts to eliminate township government, for example, ignore the fact that many Hoosiers see local government as more responsive to their needs than state and federal government.

“In some sections of Indiana, township government is the cornerstone of the community,” Karickhoff said. That seems especially so in rural areas that depend on volunteer fire departments in their townships for public safety. In urban areas, township trustees are known as the providers of “poor relief” for people in need.

The Kernan-Shepard report questioned the efficiency of the delivery of public safety and poor relief at the township level and it identified a myriad of problems, including little public reporting of how public money is spent.

Karickhoff says that’s why the Kernan-Shepard report has value beyond legislation that emerges from it: He said it’s pushed some forward-thinking local government units to look for ways to consolidate their services, before the state steps in to force them to do so. In Howard County, where he lives, the township trustees are talking about redrawing township boundaries to better match up with school district boundaries. The goal, he said, is more efficient delivery of services.

For Shepard, that marks progress. He’s pleased the commission’s report continues to generate legislative proposals four years after it was issued, rather than being shelved.

“There are very substantial changes that have been made (to local government),” he said. “I really see the glass as half full.”

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com.

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