Kokomo Tribune; Kokomo, Indiana

September 1, 2013

The problem with poor relief

Trustee system dogged by efficiency questions

By Scott Smith
Kokomo Tribune

---- — Tuesday mornings, a line forms at the Center Township Trustee’s office. Checks are handed out in an orderly fashion to a group of people who all seem to know each other. Funds from Social Security, disability, state Temporary Assistance for Needy Families and other entitlements, minus whatever the trustee has already disbursed for rent, utilities and necessities, are handed over.Anyone approved by state or federal welfare authorities can serve this “payee” function, which helps ensure the disadvantaged keep a roof over their heads and the electricity turned on.But Center Township, by virtue of its caseworkers and organization, serves as almost a second welfare office in Kokomo. The same people who depend on the state Family & Social Services Agency are familiar with the trustee and take advantage of the office’s services.If you’re poor, down-and-out, or just in need of some temporary aid, the trustee’s office is Indiana’s avenue for help. If you qualify for state and/or federal aid, the Center Township trustee’s office will help you sign up. They might pay a utility bill or two, maybe a month’s rent. They might negotiate with a landlord on your behalf.“The one big difference is that we do not give out money. The state does. The feds do,” Center Township Trustee Jean Lushin said. “It’s very, very accountable, in terms of the assistance we hand out.”An old systemThe trustee system goes back a long, long way.Michael Hicks, director of Ball State University’s Center for Business Research, said the roots of the system date to the time of the Louisiana Purchase in the wake of the French and Indian War. The hundreds of trustee’s offices, which have largely been eliminated elsewhere, give Indiana the dubious honor of having more units of local government per capita than any other state.They range in size from the Center Township office in Marion County that's housed in a grand, six-story building, to the private residence office in Ervin Township, which gave out exactly zero dollars in township assistance last year. Back in 2007, with then-Gov. Mitch Daniels on the warpath, it looked as though the institution might not survive. Tagged as an archaic throwback, the trustee system was under fire. Then-Indiana Supreme Court Chief Justice Randall Shepard and former Indiana Gov. Joseph Kernan called for the elimination of trustees in their 2007 report to the Indiana General Assembly. Daniels backed the Kernan-Shepard report, and a few local government reforms followed. The Legislature took away one key function from all but a handful of trustees by making property tax assessing a county function. Only trustees in larger cities still act as assessors. Accusations of nepotism, mainly aimed at trustees, prompted the Legislature to tighten anti-nepotism laws.But the anti-trustee tide had seemingly run its course by the end of Daniels’ second term, and in the first legislative session with Mike Pence as governor, efforts to eliminate trustee offices were almost non-existent. Even the Indiana Chamber of Commerce, which took the lead against the trustees, focused on other issues.“I don’t think it’s permanently dead; I think there was possibly some legislative fatigue from the Daniels administration,” Hicks said. “[Daniels] basically did 20 years’ worth of work in about six years.”State Sen. Jim Buck, R-Kokomo, was one of the biggest opponents of township elimination, incurring Daniels’ wrath in the process. In 2009, after Daniels lost a key vote, Buck publicly said Daniels was trying to recruit a primary opponent in Buck’s district.Buck said he hasn’t head of any impetus from either legislative leadership or the governor’s office to resurrect the issue.“If there was an overwhelming desire from various communities to [consolidate local government], we would have heard about it,” Buck said. “I’ve not seen anybody step up to that.”Indiana Chamber President Kevin Brinegar said the issue will eventually come back, driven by ongoing problems within various trustees’ offices, and he said he’s curious how the wave of freshmen legislators will treat the issue. But many legislators came up through local government, and there is a certain amount of gratitude for the local government workers who also serve as foot soldiers for the political parties.“Voters overwhelmingly support most of the reforms in the Kernan-Shepard report, but the problem is they are not highly motivated,” Brinegar said. “But for the local government officials who oppose [the reforms] it is the most important issue, because it’s their livelihoods.”Trustee rouletteThere are issues with trustee’s offices, which largely fly under the public radar, at least until a state audit is published. In 2011, former Harrison Township Trustee John Harbaugh Jr. was required to pay more than $16,000 back to taxpayers after an audit uncovered shoddy bookkeeping and questionable costs. Harbaugh decided not to run again, but problems remained. Unable to make heads or tails of the township’s books, the Indiana State Board of Accounts gave up and allowed the new township officials to restate their account balances, to the tune of over $100,000.But according to Brinegar and Hicks, the biggest problem with townships is that they represent an extremely inefficient means of distributing scarce property tax dollars.In Taylor Township, longtime Trustee Dianne Kuntz spent $8,350 on direct assistance last year, while drawing an annual $18,000 salary and receiving $4,000 rent a year for keeping the township offices in an outbuilding she built next to her home. Her husband, who helps her run the township, received another $4,350.Taylor Township also has about $900,000 in reserves, more than three times the township’s annual expenditures.Across U.S. 31, in Harrison Township, Trustee Joyce Ancil helped four times more people in 2012 and spent nearly eight times as much on poor relief as Kuntz.The huge discrepancy, which can’t be tied to guidelines (they both say they use the same ones) or to relative poverty (they have close to the same number of families in poverty) leaves taxpayers with a quandary.Is Kuntz too stingy? Is Ancil too generous? Both trustees defended their positions.“Would you prefer I just write a check to pay for everything, or would you prefer that I’m frugal and help people help themselves?” Kuntz said.“I denied a lot of people last year, but if you’ve got a family of three or four and you’re on minimum wage, you can’t live on that,” Ancil said. “I can’t stand to see little kids put out of a place to stay because their parents don’t have any money.”For Hicks, who has authored two of the leading studies on local government reform in Indiana, the larger problem is that trustees are limited to very narrow functions.City and county leaders are forced to choose between dozens of competing uses for local tax dollars, and are required to prioritize, Hicks said.Trustees have essentially two functions: Fire protection and poor relief. If money isn’t required for either of those purposes, then the money tends to accumulate, he said.“The best evidence is that it’s either a boondoggle, like several hundred people getting poor relief checks they were passing out in Lake County, or it doesn’t do what you’d like to do with poor relief,” Hicks said.The growing surplusCenter Township in Howard County had $7.4 million in reserves at the end of 2012. Center Township Trustee Jean Lushin used to say he was keeping a large balance in case of an economic downturn. Then the economy hit bottom in 2009 and the local unemployment rate hit 19 percent.But federal money poured in to fill the gap, and Lushin’s cash balances not only didn’t dip, they continued to grow at the same pace.Now Lushin says he’s concerned about future legislation affecting his office. There are no plans to shrink the reserves, which are now three times what the office spends in a year.“There’s no real plan [for the reserves] but it’s not like it’s missing,” Lushin said. “It’s better to have a reserve than to be very conscious about funds; you don’t want to tell people ‘I can’t help you because I’m worried about money.'”If there’s anything everyone agrees on, it’s that the township offices could be consolidated, the way township schools were consolidated back in the 1940s and 1950s.Buck said Howard County’s consolidation efforts came closest. Following a $14,500 study and a year of planning, a proposal to consolidate six of the county’s 11 townships was defeated. Monroe, Honey Creek, Center, Taylor and Harrison townships didn’t participate in the vote, which only concerned the very small, rural townships on the east and west edges of the county.Lushin said he could take over the trustee functions for the other 10 township offices with little trouble. But he said he didn’t actively stump for the consolidation plan because it didn’t involve Center Township. He said allowing county government to take over the trustee function, “would make it too large, and too bureaucratic.”By excluding the vast majority of the county’s population from the vote, the consolidation effort also left in question what might happen in a county-wide referendum.Brinegar said his interest in the issue became personal when his township board in Hamilton County voted to give themselves health insurance benefits.“I don’t think attending five meetings a year justified full-blown health insurance at the taxpayer’s expense,” Brinegar said.Even so, he said, “the real problem is the structure, more so than certain individuals.”“We’re in a property tax-capped world,” Brinegar said. “Shouldn’t all of that tax money be rolled together and prioritized?”Scott Smith can be reached at 765-454-8569 or at scott.smith@kokomotribune.com