INDIANAPOLIS | A Calumet Township official told a legislative panel Tuesday it is "impossible" for the township to reduce its tax rate enough to avoid new state sanctions.
Curtis Whittaker, the township's financial manager, explained to the General Assembly's Commission on State Tax and Financing Policy that low property values in Gary, Griffith and unincorporated areas of the township, poor tax collections and the effects of property tax caps force the township to request, or levy, more money than it needs because it only will get about half.
"If we don't ask for $11 million and ask for what we'll spend, we know we'll get even less than that," Whittaker said. "We have been trying to do more with less."
The township last year spent $5.8 million on poor relief, though only $2.2 million was paid to vendors to support needy township residents. The rest — $3.6 million — was spent on administrative costs, according to the state's Department of Local Government Finance.
Total township spending in 2012 was $7.5 million.
Whittaker said nearly all the administrative expense goes toward staff, equipment and supplies that support direct poor relief.
He said if the township's finances were accounted similar to nonprofit organizations, the township's administrative costs would be a much smaller share of its spending.
The commission chairman, state Sen. Brandt Hershman, R-Buck Creek, wasn't persuaded.
He said other Indiana townships with similar populations, income levels and property values as Calumet Township spend far less.
A Hershman-sponsored law enacted earlier this year requires Calumet Township reduce its township assistance tax rate below 12 times the statewide average. The rate is calculated by dividing the township's levy by the assessed value of property in the township.
Calumet Township's rate currently stands at 22.6 times the state average, according to the Legislative Services Agency.
The law authorizes the state to take over township finances next year if the township does not reduce its tax rate.
In addition, the town of Griffith could leave Calumet Township and join another in 2015 if state intervention fails to bring down the rate.