The purpose of the blue-ribbon Commission on Local Government Reform (hereafter The Commission) is to develop recommendations to reform and restructure local government in Indiana in order to increase the efficiency and effectiveness of its operations and reduce its costs to Hoosier taxpayers.
For its size and population, Indiana has far too much local government. Indiana has some 2,700 local units of government authorized to levy property taxes. Governing these units are more than 10,700 elected officials, 1,100 of whom assess property. Few other states have as much local government.
Over the past 20 years, total local government spending funded from property taxes (including cities, counties, schools, libraries and other taxing units) has increased at more than twice the rate of inflation and tax base growth. When spending grows faster than the tax base, the result is increased property tax rates and a growing property tax burden for Hoosier citizens. Meanwhile, state subsidies for local government spending, in the form of property tax relief credits (PTRC) have skyrocketed, more than doubling since 2002. In the first year of this biennial budget, the state will provide a record level of $2.3 billion in property tax relief. Without such payments, property tax bills would be even higher.
Local government in Indiana has remained essentially unchanged since the mid-19th Century, despite the enormous economic, social, and technological changes that have occurred since that time. The unneeded overhead of our antique system of local government drains dollars from our school classrooms, from our public safety first responders, and from the pockets of property taxpayers. Indiana will never be able to provide excellent local services at reasonable local tax levels until true reform occurs.
To that end, I have created the bipartisan Commission on Local Government Reform to review our government structure and make recommendations for meaningful change. Two distinguished Hoosiers, former Governor Joseph E. Kernan and Indiana Supreme Court Chief Justice Randall T. Shepard, chair the Commission. The Commission will operate under the auspices of the Indiana University Center for Urban Policy and the Environment, which is part of IU’s School of Public and Environmental Affairs.
In December 2007, the Commission will deliver its recommendations to the citizens of Indiana. These ideas will be available for discussion by the General Assembly beginning in January 2008.
With the work of this Commission, we will take significant steps toward our goal — to reduce the cost of local government by transforming it into one that provides all Hoosiers with excellent services at reasonable cost.
Governor of Indiana