Some Indiana townships would dissolve as local governments take over

Covered townships would dissolve, and a county, city, or town would take over their work. A township qualifies if it has fewer than 6,700 people and its 2024 aid costs were no more than twice employee pay, or if at least 80% of its area and 51% of its residents are inside the same city or town. A township must not run a fire department. A township in a fire district, or one that participates in a fire territory without providing the fire service, may qualify. Exemptions cover townships in counties with consolidated cities and certain mergers begun by December 31, 2026. Certain countywide mergers into one township with at least 6,700 people are also exempt. The covered townships would dissolve on January 1, 2028.

Township leaders would name a receiving local government, and a joint board would prepare a transfer plan. This applies to townships covered by the proposed reorganization rules. A small township may name a neighboring city or town, but a connection only by a strip of land under 150 feet does not count. A township mostly within a city or town may name it. Either may name a county. If a township does not choose, or its chosen municipality does not approve a plan, the county where the township is primarily located takes over. Townships would choose by June 1, 2026; a chosen municipality would need to approve its plan by December 31, 2026.

A receiving city or town would create separate township service areas inside and outside its borders. This applies when a city or town takes over a township with land outside its borders. Tax rates may be the same across the township or differ by service area, but each area's rate must apply evenly within that area. County officials may lower or change the proposed tax plan for the outside area, but may not raise it. If no plan is approved, the last approved one continues. The receiving government would begin setting service-area taxes in 2027 for the following year.

Receiving governments would keep old debt and pension costs with the taxpayers already responsible for them. The rule covers debts incurred by the township or receiving government before January 1, 2028, and pension obligations existing on January 1, 2028. Taxpayers who were responsible before the transfer must keep paying these costs; other taxpayers cannot be charged for them.

Local governments would need the receiving government's vote of approval before taking certain expansion steps. Within a covered township, the steps are starting an annexation, creating a fire protection area, extending infrastructure, and expanding zoning control. The receiving government may take these steps without that approval only to carry out the reorganization plan. The approval rule would apply from January 1 through December 31, 2027.