Julia Goon, standing, Prairie Township trustee, speaks to members of the Kosciusko County Council Thursday evening after their meeting. During the meeting, Goon, on behalf of the Kosciusko County Trustees Association, warned the council about the impact Indiana Senate Bill 1 and House Bill 1461 would have on townships. Photo by David Slone, Times-Union.

By David Slone
Times-Union

KOSCIUSKO COUNTY — A number of township trustees attended the Kosciusko County Council meeting Thursday evening, Aug. 14, to heed a warning about the effects of Indiana Senate Bill 1 (SB1) and House Bill 1461 (HB1461).

Julia Goon, Prairie Township trustee, speaking on behalf of the Kosciusko County Trustee Association, said, “We are concerned … because of Senate Bill 1 and the township impact it’s going to have. The legislators really did it to us.”

She said they run their townships from their fall and spring tax distributions and local income tax monies, and that is going to change.

“Townships statewide are projected to lose $25.5 million annually by 2028 due to new deduction changes, ready growth caps, elimination of the local income tax, property tax relief credit,” she said. “The fiscal analysis from the Indiana General Assembly details property tax impacts through 2028. The local income tax, the LIT that we receive monthly, that is not affected until Jan. 1 of 2028.”

The township trustees were encouraged by the Indiana Township Association to let their county council know how the townships would be affected.

“The LIT councils are going to be eliminated as of Jan. 1, 2028. County councils will have sole authority to approve all LIT rates. Townships may receive up to 0.2% LIT from non-municipal civil taxing units, subject to county council approval. So it’s not guaranteed that any townships will get LIT unless the county council gives it to us, and so what we’re going to have to do is present you with a resolution,” Goon said.

She said the trustees will be back before the council with that resolution — “unless the state legislators realize what they’ve done” — in July 2027 stating they want their share of the LIT funds that they use for fire departments, cemetery restorations and other things. “It not only affects our fire departments, it affects fire territories. If they don’t get that LIT money, I don’t know how Turkey Creek Township is going to survive, or Tippecanoe or Warsaw-Wayne Fire Territory. It’s a lot of money that they’re not going to get,” Goon stated.

New fire territories created after Dec. 31, 2024, will be capped at 40 cents per $100 of assessed valuation. Existing fire territories will keep their current rates, she said about SB1. HB1461 also will have an impact on the townships, she continued.

“So, we have to do an annual Capital Improvement Plan, starting Sept. 30 of 2025. It is a mandatory transfer requirement: 30% of the amount by which unrestricted fund balances exceed the following year’s budget must be transferred annually to a new township roads and infrastructure fund. This transfer will be on balances of our township fund and our rainy day fund, transferred to this new township roads and infrastructure fund in our township, as of 1/1/2027,” Goon explained.

The townships then will have to do a memorandum of understanding with a city or town, or with the county if the township doesn’t have a town or city. Prairie Township would have to do an MOU with the county, while Plain could do an MOU with its road funds with the town of Leesburg, for example.

“So the importance of the (CIP), the documentation is critical to protect township reserves from the roads fund transfer,” she continued. “So in our (CIP) … it’s unclear whether or not we have to present our CIP to a county council.” The CIP has to be adopted by Sept. 30 or the township won’t get its spring and fall tax distributions the following year.

Councilwoman Kimberly Cates said she was glad that the trustees came because conversations between the council and townships have been going on “for quite some time” about the new legislation. She said pressure needs to be put on the state legislators to “make sure they do the right thing.”

Goon said everybody needs to be calling their legislators and she hoped that the legislators retract what they’ve done “because this is a lot, this is a big deal.”

Council President Tony Ciriello said he was in a meeting Thursday morning with the chairman and vice chairman of the Indiana House Ways and Means Committee to discuss the effects of SB1. Also at the 90-minute meeting were Councilwoman Rachael Rhoades, the mayors of Nappanee and Warsaw and several other people, he said. He said they’re fully aware of the effects of SB1 and they’re trying to see what they can do “to calm that down a little bit.”

Goon said the property tax changes will affect everybody, not just townships.

Ciriello said they’re going to monitor SB1 and any changes to it. “When it comes budget time in (2027) is when we’re going to have to address it,” he stated.

Goon said in July 2027, the trustees will be back with their resolution.

Councilman Dave Wolkins asked if the townships get any LIT money now.

“Yes. Every month. We all do,” Goon said.

“And that’s going to go away unless we approve it?” Wolkins asked.

Goon said that’s what they say, unless the county council gives it back to the townships but then only on a certain percentage.

“We have to create a road and infrastructure fund and they really want us to do that now in our townships, even though it’s zero dollars because no money will be transferred to that fund until 1/1/2027, and it will be 30% of unrestricted funds, so that means our township fund and our rainy day fund. Fire fund, (cumulative) fire, recreation and donation funds — if you have them — are restricted. We will not transfer 30% of those funds into a road fund. Only our township fund and our rainy day fund,” Goon explained.

On the road fund the Indiana General Assembly came up with, Goon said, “If you had a MOU with the county, and the county calls me up and says, ‘We’re going to repave CR 500 West,’ or ‘pave it, it’s dirt, how much money do you have to put toward that?’ Well, the way it reads right now, we can deny them anything. We don’t have to help them pay for that. It makes no sense whatsoever, but if I would call up the county highway and say, ‘hey, I want 500 West paved and I’m going to give you $20,000 to help pay for that,’ then that’s OK. But they can’t make us give them any money. That’s the way it reads right now.”

Goon asked how many times does a taxpayer have to be taxed for roads. “You have wheel tax. I pay more wheel tax than I do excise tax on my vehicles. We have a county tax on roads. We have state, we have gas tax. Now our township tax. Aren’t we kind of being duplicated here a little bit with roads?” Goon asked.

Cates said that by 2030 it’s estimated that the state is going to be about $10 million short. Goon said the townships are doing many things for its people, but the state thinks the townships are hoarding and have gobs of funding, which they don’t.

Later in the meeting, Seward Township/Burket Fire Chief Kevin McSherry, representing the 400 firemen in the county, applauded the trustees for getting ahead of the problem.

“The (fire) chiefs have put our heads together and we just turned in a 2026 budget, and we know that we’ve go to start thinking about the 2027 budget, so we are getting ahead also. We’re meeting with (state) Rep. (Craig) Snow and I just want you to listen to these trustees and help us help you,” he said.

Fire departments are running more calls now than ever before, though some of them are for petty things, he said.

“But we’re here to help the public. We want to be ready to help in the worse-case scenario as well. But, when we’re out hauling Johnny to the hospital (for getting hit with an apple in the ankle), what about Joe over here who had a heart attack? We’ve got to think about that,” McSherry said. “Nobody’s getting rich. The trustees aren’t pocketing a lot of money.”