INDIANAPOLIS -- Legislation that would require officials of Indiana's townships with high budget surpluses to explain their plans for capital projects passed this week through the state Senate Committee on Local Government.

The legislation, House Bill 1177 by Rep. Cindy Ziemke, R-Batesville, now heads to the Senate floor. The bill has already passed the House.

Ziemke's bill attempts to address excessive budget surpluses in many of Indiana's 1,005 townships. 

Across the state, townships had budgets totaling $389.3 million in 2017. But they had a total cash balance of $453.6 million, more than 16 percent above their budgeted amounts. That's enough for 14 months of operating revenues, as much as seven times the generally accepted threshold for government units.

The bill is geared to townships that have capital improvement funds amounting to 150 percent of the total budget and exceeding $200,000. They would be required to complete a three-year capital improvement plan by Sept. 30, 2020. 

Without such a plan, the township wouldn't be able to receive property taxes. 

"After they complete the capital improvement plans (the bill would) allow them to transfer surpluses into another fund they can actually use. That's been a big issue with a lot of these townships," Ziemke said.

Given current budget surpluses, the plan would affect 88 Indiana townships. An earlier version of the bill would have required 451 townships to adopt a capital improvement plan.

Townships with high balances typically save surpluses for capital expenditures such as fire equipment, station improvements and parks. Others hope to lower the levy for taxpayers or save for emergencies, according to Indiana Township Association Executive Director Debbie Driskell.

"Our primary goal in this bill is transparency," Driskell said. "There's been a lot of criticism, whether it's right or wrong, that townships have high cash balances."

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