Anderson Twp. looking at cuts, ways to grow revenue

The economy and state changes in funding for townships are being felt in Anderson Township.

Between 2006 and 2013 Anderson Township’s general fund revenues averaged $4.7 million. That average dropped to $2.6 million for 2014 and 2015 and is anticipated to decline to $1.7 million for the next five years. If this trend continues, the township’s general fund balance is projected to be depleted by mid-2020.

These statistics were shared as part of a discussion at the Anderson Township Board of Trustees July 7 workshop during a general fund update. A similar discussion took place at the board’s 2016 planning meeting held earlier this year.

“We just don’t have the revenue coming in like we use to,” Township Administrator Vicky Earhart said.

Changes in state law have resulted in townships losing tangible personal property and public utility tangible property tax reimbursements, and Local Government Fund revenue and estate tax payments. These coupled with the recession of 2007 to 2009 have resulted in many townships making significant changes in the way they do business.

The exercise of belt-tightening is familiar to Anderson Township. For example, through a series of reductions, and the use of TIF funds to cover shortfalls, the public safety levy approved by voters in 2008 was stretched into an eighth year despite having a five-year useful life.

No longer able to stretch those dollars, trustees recently approved placing a 3.55-mill public safety levy on the fall ballot to fund police, fire and emergency medical services. If approved this continuing levy is expected to sustain the township’s public safety services for at least another five years. It will generate about $4.3 million annually costing the owner of a $100,000 home an additional $124.25 per year, or $10.35 per month.

This levy addresses only the safety services needs and will not benefit the township’s general fund which is a funding source for elected officials, fiscal office, township administration, planning and zoning, facilities management, legal services, senior center, recycling center, economic development, building and grounds maintenance, public/media relations, public access TV, community events and street lighting.

The management team is looking at additional ways to cut, stretch and increase revenue, Earhart said. Some of the options being discussed would require a change at the state level. Townships are funded primarily through property tax levies. Anderson Township receives $3.50 in property taxes from every $100,000 assessed value.

Unlike counties that may levy both a property tax and sales tax and municipalities that may levy a property tax and income tax, townships may only levy one type of tax, the property tax. Working with legislative representatives, Anderson Township would like to change this. A ticket tax or earnings tax on Riverbend performers is one strategy they would like to pursue.

Other ideas mentioned during the July 7 meeting included incorporation, additional taxes, and a reduction in services.

The Anderson department heads and other employees developed and presented the trustees with a two-page list of cost cutting and fine tuning strategies/directions to consider. The management team would like to spend the next few months figuring out what can and cannot be done, Earhart said.

At some point, she said, the township will have to go to residents and find out what services are most valued and redefine basic services, she said.

Many townships have already reduced services and/or found new revenue sources.

Trustee President Andrew Pappas said Sycamore Township used JEDZ (Joint Economic Development Zone) to increase revenue from the huge commercial area it has. Through JEDZ Sycamore Township is able to collect income-tax on people who work and businesses that operate in specific areas in Kenwood.

“They were just able to do it in their area. That makes sense,” Pappas said. Anderson Township needs to find a way to increase revenue. Township residents also need to be informed about the need and options, he said.

A multi-pronged approach will be needed to address the financial challenge, Earhart said. Township department heads and staff are expected to continue discussing strategies and return to the trustees in the fall with a report of changes that could be incorporated into the 2017 permanent budget.