Realize facts about Indiana townships

By Larry DeBoer

The short session of the Indiana General Assembly is under way, and one of the topics of debate is the organization of township governments. So, some information about townships might come in handy. You can’t tell the townships without a scorecard.

Our system of township government was established by the end of the 1800s. Townships have an elected trustee and a three-member township board. They used to be responsible for schools, roads, libraries, property assessment and many other services. A few townships still play a part in these, but now townships mainly provide fire protection, emergency response and poor relief.

Indiana’s 1,005 townships had budgets totaling $378 million in 2017. That’s about 2 percent of the $18.7 billion budgeted by all our local governments. School district budgets are about 56 percent of this total, with counties, cities and towns making up another 32 percent. Libraries and special districts budget the rest.

Budgets are divided into funds, and the funds are designated for specific purposes. The biggest share of township budgets – 58 percent – are for fire protection and emergency response funds. Poor relief is another 15 percent of township budgets. The general fund makes up 18 percent, mostly for operating costs including the pay of officials and employees. The remaining 9 percent covers functions such as parks, cemetery maintenance and even a few libraries.

Almost all townships have general funds and poor relief funds. Eighty percent have fire protection funds. Fire protection also is provided by cities and towns and fire protection districts, so townships in areas served by other fire departments won’t provide fire protection themselves.

The General Assembly is debating changes in township government. House Bill 1005 proposes that townships with less than 1,200 people would consolidate with each other, or with bigger townships, so that none of them are so small. These small townships would come up with a consolidation plan by 2020, and consolidate by 2023. If they don’t act, the state’s Department of Local Government Finance would play matchmaker, to look for merger partners for the small townships.

According to U.S. Census Bureau population estimates, there were 312 Indiana townships with populations of fewer than 1,200 in 2016. Warren County has the most, with 11 small townships. Pulaski and Rush have 10. Seventy-five counties have at least one. Seventeen don’t have any. The smallest is Wabash Township in Gibson County, which has 30 people (three-zero – this is not a typo). It’s on the Wabash River, and apparently the land floods so frequently that few people live there. The next smallest is Boone Township in Crawford County, with 175 people.

In total, the 312 small townships had budgets of $16.9 million, which is about 4.5 percent of total township budgets. We can compare smaller and larger townships by dividing their budgets by population, to measure dollars per person. The small townships budgeted about $73 per person in 2017, while the 692 larger townships budgeted $57 per person. The difference is in the general fund. Small townships budget $27 per person for operating costs; larger townships budget $10 per person. Per-person budgets for fire protection and poor relief don’t differ very much between small and large townships.

Township appropriations are small, and so are township property tax rates. Smaller townships have an average tax rate of $0.0526 per $100 assessed value. That’s about five-and-a-quarter cents. Larger townships have higher average rates, at $0.0857, a little more than eight-and-a-half cents. Again, townships are a small fraction of the average total property tax rate for local governments, which is $2.47 per $100 assessed value.

How can small townships budget more per person but charge lower property tax rates? It’s not because they raise less from property taxes. Small townships levy $40 per person, compared to $37 per person for larger townships. It’s that small townships have more assessed value per person, $76,000 compared to $43,000 for larger townships. Small townships are mostly rural. They don’t have much taxable property, aside from farmland, but they have even fewer people. Assessed value per person is higher.

You can’t tell the townships without a scorecard. What would you tell them if you had a scorecard? That’s what the General Assembly is going to decide.

Larry DeBoer is professor of agricultural economics at Purdue University. Send comments to letters@dailyjournal.net.