December 2007 No. 53Table of ContentsIn Memoriam - Julia Carson 1938-2007 Can IN reform local government? IN revenues likely down in 2008 |
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Governor Daniels called her “a true original.” Indiana’s US Rep. Julia Carson succumbed to cancer after a 35-year career of public service. She served in the Indiana General Assembly for 18 years, was Marion Co. Center Township Trustee for 6 years, and was a member of Congress for 11 years. Raised in poverty by a single mom, she was lauded for her tireless efforts to end homelessness, racial discrimination, and income insufficiency. She championed a Congressional Gold Medal for civil rights legend Rosa Parks. Carson’s body will lie in repose in the Statehouse rotunda on Friday, with a memorial service at 6 p.m.
A blue ribbon commission appointed by Governor Daniels said it clearly—“We’ve got to stop governing like this.” The question is whether legislators in the 2008 Indiana General Assembly can take the high road—with its political risks—or not. The panel’s chairs, former Indiana Gov. Joe Kernan and Indiana Supreme Court Chief Justice Randall Shepard, said: “The transformation we propose will be disruptive, even painful, in the short run. Many who have vested interests in the status quo will resist these changes with great vigor. The time for a leaner, more effective government…will only come to pass if the people of Indiana insist on it.”
The Indiana Commission on Local Government Reform’s task was to streamline Indiana’s 2,730 local taxing units—now run by 11,000 officials in 92 counties—mostly chosen by partisan elections—into a 21st century efficient and low-cost system. A taxpayer revolt against court-mandated modernization of property tax assessments provoked this attempt at reform—the latest in a series going back to 1935. Is that enough to guarantee change? We’ll see.
The Commission’s guiding principles for reform were to be practical, concrete, common-sense; to make local government simpler, more understandable, responsive, transparent, flexible, and accountable; to drive real cost savings and be long-term solutions—not quick fixes—that enable sustained growth and efficiency; with equitable distribution of services and responsibility for funding them.
If enacted, the Commission’s proposals will cut local government units by 37% to 1,931 and will reduce the number of local elected officials by 53%. Here are its key recommendations for change:
The results are to reduce the number of local officials and units of government, allow only elected officials to approve taxes and debt, limit qualified appointed officials to administrative duties only, and have the state pay for state services. These changes can occur through new law, except transfer of elected officials’ duties proscribed in the Indiana Constitution; those can be enacted by 2011. Be sure to read the full plan athttp://indianalocalgovreform.iu.edu.
The mid-December economic forecast projected a $231 Million shortfall in revenue for state government, leaving a surplus of $91M for the fiscal year starting July 1, 2008, instead of the planned $322M. Nonfarm personal income is likely to grow only 3% annually thru 2009, compared to 4.4% in the past 5 years. The slump was blamed on the housing subprime mortgage crisis and on higher energy costs. Lawmakers said the dismal economic estimates are nationwide; Illinois is predicting a $3.1 Billion deficit and Michigan $1.8B less than expected.
In response, Governor Daniels told state agencies to cut their costs by 5%, meaning some projects will be postponed and some jobs left unfilled. K-12 and higher education funding, Medicaid, and teacher pension won’t be affected. The State Budget Agency said these predictions and cuts only intensified the need for tax reform in 2008.
Beginning in 2008, small tax-exempt organizations will have a new filing requirement. It’s short, easy, and electronic—the new e-Postcard. If you are a tax-exempt organization that normally has annual gross receipts up to $25,000 and does not have to file Form 990 or 990-EZ, you must file the e-Postcard. It is due by the fifteenth day of the fifth month after the close of your tax year—e.g., if your organization operates on a calendar year, the e-Postcard is due by May 15 of the following year.
What happens if you don’t file? You risk losing your tax-exempt status! If you think this new filing requirement may apply to your organization, go to www.irs.gov/eo for complete details, and while you’re there sign up for Exempt Organization’s free e-mail newsletter, EO Update, to receive up-to-date information on the charity pages of www.irs.gov.
Do you collaborate much with religious congregations in your hometown? Probably so, but just in case, a new report is worth noting. The Roundtable on Religion and Social Welfare Policy reports 69% of faith groups provide marriage counseling; 65% have a food pantry; 59% do family counseling; 59% have senior services; 48% offer emergency clothing; 37% program youth mentoring; and 32% have prison ministries. In addition, 16-24% have soup kitchens, alcohol/drug treatment, homeless shelter, after-school programs, health education, day care, and community development. The new report is at www.pewtrusts.org/news_room_ektid31928.aspx.
In the past 4 years, less than 10% of congregations sought government grants for their social services. The 15% of congregations with the most “comprehensive” such programs averaged applying for 25 and getting 3 at about $665,000 each. The most common reason for not seeking these grants was a concern over “external controls,” yet more are likely to seek government grants in the near future.
About twice as many congregations sought grants from private sources—18% overall and 29% of congregations with “comprehensive” services. They applied for fewer government grants, received funding from half they sought, and averaged $134,000 per grant—or 20% of the average government grant.
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