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Proposed bill targets township funding

By Clay Winowiecki - cwinowiecki@chronicle-tribune.com

A recently introduced House Bill may make township trustees invest yearly surpluses into township improvement projects.

If passed, House Bill 1177 would require townships to prepare a capital improvement plan if their end of the year balance exceeds 150 percent of the township's annual budget estimate. If a township were to exceed this and not adopt the capital improvement plan, the state would prohibit them from collecting property taxes for the following year.

The bill is authored by State Rep. Cindy Ziemke (R-Batesville) and co-authored by State Rep. Ronald Bacon (R-Chandler) and State Rep. Kevin Mahan (R-Hartford City).

“These townships are getting hounded (because) there are millions of dollars that they're sitting on,” Mahan said. “Many of them say ‘I’ve got all this money in a silo I could use for poor relief, but I'm not hardly writing any poor relief, but I need a new fire truck, so we’re trying to save to buy this fire truck.’”

To solve this funds problem, the bill would allow for a one-time transfer of funds to take place, which could be granted after a public hearing. This would allow townships to transfer unneeded money from one fund to another.

But first townships would need to create a capital improvement plan, then have a public meeting to transfer the funds. This can be done no later than Dec. 1, 2020, according to Mahan.

A capital improvement plan creates a blueprint for improving a township's infrastructure. Plans include each township's capital projects, as well as equipment purchases and local government studies.

“It’s important to have a capital improvement plan because we shouldn't be doing things by the seat of our pants,” Mahan said. “It's just good business to have a capital improvement fund in place.”

Should a township fail to adopt a capital improvement plan for the excess funds, the state would prohibit the township from collecting property taxes for certain capital improvement funds the following year.

According to an article by CNHI Statehouse Reporter Scott L. Miley, published in the Hendricks County Flyer, 451 of Indiana's 1,005 townships would need to submit a capital improvement plan.

Miley also reported that by the end of fiscal year 2017, Indiana townships had a combined surplus of $453.6 million. Three had more than 10 times their annual budgets.

Mahan was unable to say how many Grant County townships would be impacted by the bill.

According to Mahan, township trustees have been asking for this bill for a long time and he expects it to make their lives easier.

On Thursday, the bill went to the Ways and Means Committee, where it passed by a vote of 22-1. Next, the bill will go to the house floor for a second reading early next week.

“This is a very popular bill that’s going to take care of our townships,” Mahan said.

Pleasant Township Trustee Ted Tobias said the new bill would be unlikely to affect him in the near future.

“I’m going to be honest, in the last three years it’s been really difficult to get (enough funding),” Tobias said.

Tobias said Pleasant Township is so rural that it’s challenging to get enough money to help with some of the township’s needs. He added that some townships have put excess funds into improving township facilities, such as playgrounds, but he is unable to provide capital improvement projects like that.

According to Franklin Township Trustee Kevin Carmichael, he doesn’t expect the bill to impact Grant County.

“I really don’t think it will affect us a lot here in Grant County,” Carmichael said. “I could be wrong, (but I expect it to) impact the bigger townships in Indianapolis and townships in Fort Wayne (more than us).”

Carmichael said that there is a wide range of how much money townships make, depending on the county they’re in and the cities in their jurisdiction.

Carmichael added that he doesn’t expect the bill to impact his township.