By Mitzi S. Morris for the Indiana Capital Chronicle.
Broadcast version by Terri Dee for Indiana News Service reporting for the Indiana Capital Chronicle-Free Press Indiana-Public News Service Collaboration
As Indiana anticipates slow population growth in the coming years, small cities and towns in rural Indiana are pushing forward with projects to attract residents and businesses to their communities.
Growth over the next four decades is projected to be lower than it was in the decade between 2000 and 2010, according to Matt Kinghorn, senior demographer at the Indiana Business Research Center. More than 70% of Indiana's counties are expected to lose residents over the next 30 years, many of which are rural and also lost population in the 2020 census.
"And the counties that are growing quickly are generally taking population from other areas of the state. So it's not an overall net increase," said Matt Greller, chief executive officer of Accelerate Indiana Municipalities (AIM).
But small Hoosier communities aren't going down without a fight.
Local businesses, organizations and governments are applying for grants, investing in quality-of-life projects and supporting small businesses to draw new citizens and spur economic growth.
"For a community to have the amenities that folks want these days, whether it's broadband or trails or a vibrant Main Street, you've got to have a coalescing of people to make that happen," Greller said.
Going after grants
Grants are crucial in helping small cities and towns in Indiana launch and complete initiatives. Community foundations, state entities and federal sources all play a role in funding local projects.
For example, Boonville in Warrick County is working toward Indiana Accredited Main Street (IAMS) status after completing the Aspiring IAMS 1-year Program.
"(Indiana Accredited Main Street) opens the door for more grant money, which is the key to doing just about anything that you want to do of significance. If you can't get grants, then you've got to do fundraising, and it's pretty hard to raise a million dollars in a town like Boonville," said Jim Miller, executive director of Boonville Now. His group promotes the city's downtown.
The city even hired a firm with a grant researcher dedicated to ensuring community leaders know about every possible funding opportunity.
"The idea was, 'Let's pay this company $50,000 a year, and we'll be looking at $100,000, $200,000, $300,000 grants per year.' Then it pays for itself," Miller said. "I've got spreadsheets of probably 20 things that they're working on."
Miller employs Placer.ai, a location analytics software, to track foot traffic in the city, then uses the information to apply for grants. Janelle Amy, executive director of Main Street Corydon, a Nationally Accredited Main Street community, also plans to use Placer.ai data to attract local investment.
Indiana University Southeast (IUS) is "able to send some reports for us to be able to measure and see how many pings on these phones were coming through and being able to see those heavy spikes whenever we have those larger festivals, especially in our downtown, hoping that we're able to see that data year after year to see, 'Are we seeing continued growth? Should we focus our efforts elsewhere?'" Amy said.
Another grant source, the state-funded Regional Economic Acceleration and Development Initiative (READI), has given hundreds of millions of dollars to economic growth projects across the state. The READI program is not in the current version of the state budget, according to Greller.
"I hate to see that go away because it's such an innovative thing that set apart Indiana, certainly in the Midwest and maybe the rest of the country. It is having a real impact on some of these rural communities," he said.
Quality of life investment
For small Hoosier cities and towns to survive, Greller said municipalities must be willing to fund projects that meet their residents' needs, particularly when it comes to quality of life.
"We live in a world where we all want lower taxes," said Greller. "But there are studies after studies that show once a government decides to make a formal investment in a community in a meaningful way, that typically has a snowball effect."
Miller said increased property tax values helped Boonville accomplish several quality-of-life projects.
"We've been able to take advantage of that and issue bonds to be able to build a new pool and to completely renovate the splash pad and the playground area and the basketball courts and things at City Lake," he said.
But property taxes are in the crosshairs at the Legislature.
Greller emphasized investment in city and town parks as a key driver of economic growth in rural Indiana.
"(Smaller parks) drive things like community events, farmers markets, summer concert series, hot rod festivals or whatever it is that wants to come to an individual community. Those kinds of investments have done well and created good returns over the years," he said.
Miller said Boonville is also focusing on historic preservation with the Mt. Liberty Baptist Church and School restoration project. In Corydon, the town is building a skate park and increasing walkability by connecting downtown to Rice Island Park.
"Being able to expand that further out ... we've opened up a whole other level for people to be able to visit our downtown and hopefully shop and support and live here as well," said Amy.
Attracting businesses and residents
When big employers leave small Hoosier cities and towns, residents often go with them. Corydon is looking to draw a new industry after Tyson Foods' closure last year affected nearly 370 employees.
New Gov. Mike Braun's campaign included a plan targeting rural Indiana, and the current state budget proposal includes a tax credit to attract qualified private sector investors to raise and invest flexible capital into rural communities and help rural businesses to sustainably expand their operations.
Greller said Gas City went through a similar situation as Corydon when the area was hit hard by the downturn in automobile manufacturing jobs.
"They pivoted. They made some strong investments in their community. They've seen an uptick in growth and population. They just built the performing arts center, which is a sign of things improving in those kinds of communities," he said.
In Boonville, two new establishments - a restaurant with catering service and a cigar lounge - recently opened in the historic district, according to Miller.
"What we're trying to concentrate on is bringing in more small businesses because we do have some empty spaces on the square and around the square," he said. "We don't have any more land to be able to give a bigger industry that wants to come in."
Thanks to city grants, Boonville entrepreneurs can apply for money to enhance building facades and revolving loan funds to make other improvements or start a business. Corydon also has a facade program funded in part by the Harrison County Community Foundation and a community collaboration fund created from a state grant.
"We were able to offer up to $5,000 to our downtown business owners for whatever initiative they needed at that time. So it could be purchasing new inventory, helping them with their marketing, Just whatever we could do to give them an additional boost to keep them here and hopefully support their initiative moving forward," Amy said.
Programs like Make My Move and Choose Southern Indiana offer remote workers incentives for relocation within the Hoosier State. However, Greller questioned how emerging return-to-office policies will affect these initiatives in the future.
"I'm interested to see what happens in some of these communities that have had success attracting those folks into their areas," he said.
Amy viewed new housing developments in Corydon and Harrison County over the past year as a sign of residential growth.
"I know of at least three additional apartment complexes within the Corydon area that are very close to downtown," she said. "And new subdivisions have been populating as well in Corydon and beyond."
Pushing past reality
Despite the efforts of small cities and towns in Indiana to remain independent, Greller said some areas that thrived on historic economic drivers may need to have some tough conversations.
"We have some small communities that were there because there was a grain elevator 150 years ago or there was a railroad stop 150 years ago. Does it make sense for the viability of the region they're in to continue to exist as an incorporated area? Maybe we ought to look at merging with other forms of government for the greater good," he said.
Federal funding cuts are also a concern regarding infrastructure projects and other initiatives in small municipalities.
"Many communities are fortunate to receive Economic Development Administration, (U.S. Department of Agriculture), Small Business Administration and other types of federal funding. I do believe that economic growth could be threatened if funding commitments from these federal agencies are halted abruptly," said Darrell Voelker, executive director of the Harrison County Economic Development Corporation.
To persist, Greller said small Hoosier cities and towns must get creative and maximize opportunities to ensure sustainability and longevity.
"We're going to have to take a close look at ourselves and make sure we're running as lean and efficiently as possible to make sure we have resources to invest in these types of programs," he said.
Mitzi S. Morris wrote this article for the Indiana Capital Chronicle.
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By Claire Carlson and Lane Wendell Fischer for The Daily Yonder.
Broadcast version by Isobel Charle for Washington News Service for the Public News Service/Daily Yonder Collaboration
When students in rural Trinity County, California, gaze out their classroom windows, they see the tree-filled landscape of Shasta-Trinity National Forest, which spans more than 2 million acres in the northeast corner of the state.
The expansive forest might inspire dreams of outdoor adventure for locals, but for Trinity County and other rural forest communities across the U.S., it also represents a fraught cycle of inadequate public school funding.
That’s because these schools rely on the Secure Rural Schools and Communities Act (SRS), a federal program that allocates money to counties that overlap National Forest land.
Because public land cannot be used or taxed for local interests, the SRS program offsets this loss of local revenue by allocating federal funds to support essential community infrastructure like roads and schools. SRS requires regular reauthorization, typically every three years and is often accompanied by reductions in funding.
The law temporarily expired in 2016 and rural school districts missed out on a year’s-worth of SRS payments. At the Trinity Alps Unified School District, this budget shortfall prevented the district from fixing a dangerous outbreak of toxic mold. Multiple buildings in the district were closed, disrupting school for months.
While SRS funding has served as a lifeline for school districts in forest counties, advocates and economists say the cyclical struggle for ever-shrinking funds makes SRS an unsustainable way to support rural students, especially when budget shortfalls can hurt student performance and health.
“This every three-year thing, it’s brutal,” said Jamie Green, superintendent of Trinity Alps Unified School District, in an interview with the Daily Yonder. “Absolutely brutal.”
The law was up for reauthorization in 2024 but died last December without a vote from the House of Representatives. The Senate had already voted unanimously to approve it.
Advocates have continued to fight for reauthorization in the new year. But Congress’ failure to include the legislation in March’s federal spending package raises concerns about another lapse in funding, similar to 2016, that could jeopardize school budgets and leave their futures in flux.
“We can continue advocating,” Green said. “But I don’t know where it goes from here.”
In 2023, Trinity Alps Unified School District received $600,000 from SRS. These funds accounted for 5% of the district’s budget and were essential in paying for teachers, programming, and maintenance work. With no clear path toward reauthorization, Green’s current goal is to do what he can to cushion Trinity Alps for the looming shortfall.
“You don’t buy the new bus that you need. You don’t fix a leaky roof. You don’t replace people that have just retired,” Green said. If the bill isn’t passed, he said the district may have to cut seven jobs, which could lead to larger class sizes, likely hurting the students who need help the most.
“I can’t tell you how stressful it is when I go down to the elementary school and I’m looking at people that I might have to let go that we desperately need,” Green said.
A Century-Old Promise — A Century-Old Fight
The history of federal support for rural schools in forest communities extends far beyond the SRS program’s inception in 2000.
In the late 1800s, large swaths of the country’s forest land were placed under reserve, later designated as National Forest land, by the U.S. government. About 80% percent of the land in Trinity County, for example, is owned by the federal government.
The mass federalization of forest lands prevented rural communities from developing or taxing the land to support local governments and public schools.
“Rural communities were pretty much up in arms…they were concerned by the federal government coming in and taking massive amounts of their land,” said Lonnie Hunt, head of the National Forest Counties and Schools Coalition, a group of community volunteers who advocate for forest counties across the country.
In response to these rural concerns, Congress designated a portion of these forests harvestable for timber. In 1908, President Theodore Roosevelt and chief of the Forest Service Gifford Pinchot introduced a bill that specified that 25% of the revenue raised from National Forests would be shared with the counties that overlapped this forest land to pay for local infrastructure.
For a few decades, this plan worked: Rural counties could fund their schools, roads, and essential services with the revenue gained from logging.
But by the late 20th century, the revenue share proved too volatile for local government and school budgets. Between 1985 and 2000, National Forest payments fluctuated by an average of 30% year-to-year, according to the Congressional Research Service. Regulations like the Northwest Forest Plan that were meant to protect old-growth forests from overharvesting in California, Oregon, and Washington, made it even more difficult to depend on timber revenue.
“For various reasons totally outside the control of these local communities, timber harvesting just pretty much ground to a halt for environmental reasons, challenges, lawsuits, what have you,” Hunt said. “And of course that meant that these local communities suffered a big economic loss.”
This volatility led to the creation of two reforms, which are still in effect today.
The first, Payments in Lieu of Taxes (PILT), are federal payments to counties to offset the local property tax lost from nontaxable public land. PILT funding can only be used for county budgets, not for schools.
The second is a set of transition payments to help counties move away from timber-dependent economies. These payments came from the Northwest Forest Plan and the eventual SRS legislation, passed in 2000.
SRS allocated counties payments based on the average of their three highest timber revenue years between 1986 and 1999. The law was originally authorized through 2006, at which point counties were expected to find new ways to fund their schools and roads.
While some counties successfully pivoted to other industries, more timber-dependent communities had a harder time transitioning, according to Mark Haggerty, a senior fellow at the independent nonprofit research institute Center for American Progress.
“The reason those [counties] were growing is because they were either close to a city, so they were actually participating in the new economy, or they became recreation and retirement destinations because they had a national park or some kind of amenity,” Haggerty said.
“But the rural, isolated timber-dependent communities effectively didn’t recover, no matter what kind of transition assistance was provided.”
This was the case in Skamania County, Washington, which saw a huge change in the amount of money made through timber-related jobs from the 1970s to the 2010s. Between 1970 and 1989, timber earnings accounted for 37% of Skamania County locals’ income, according to a report from the independent research group Headwaters Economics.
By 2014, timber accounted for just 1% of total earnings.
While the U.S. Census Bureau defines Skamania County as a metropolitan area because of its proximity to the large cities of Vancouver and Portland, Oregon, the county has a lot in common with other rural counties that have benefited from SRS. Eighty percent of the county is public land, and 90% is forested. The Columbia River borders it from the south. Its total population is just over 12,000.
“The goal of [the original SRS funding] was very, very admirable,” said Tom Lannen, former Skamania county commissioner and Stevenson resident. “Depending on where you were at, some counties did a marvelous job and had all kinds of resources that allowed them to transition from a timber based county to a much more diverse one.
“Unfortunately, Skamania County and a number of other ones didn’t have that luxury,” he said.
Without other industries to fall back on with the decline of timber, the county could not sustain itself without help from the federal government. That means SRS payments have remained vital in paying for Skamania County’s infrastructure and schools.
But its year-to-year volatility has still left the county scrambling. Over the past 15 years, the amount of money has decreased precipitously, affecting the job skills training programs offered to students.
“We’re trying to hang onto as much of that as we can so our students can stay and have the skills and the abilities that they need to go out and have living-wage jobs in our community,” said Ingrid Colvard, superintendent of the local Stevenson-Carson School District, at a press conference about reauthorizing SRS in late February.
The funding pays for welding and carpentry programs, a post-high school counselor, and a therapist, among other things. “This extra money, this additional 5% – it’s in our budget, and we have to have it to continue these things,” Colvard said.
Some folks in the county say that opening up more of the National Forest to timber harvest could get the community back on the path to economic success and rid them of the need for SRS.
But that would require overturning the decades-old Northwest Forest Plan – no easy feat. And there’s no promise timber harvests would ever be as profitable as they were at the height of production in the 20th century.
And even if timber harvesting were to return, it’s a largely mechanized industry today powered by automated equipment and high-efficiency mills. Timber doesn’t provide the number of jobs that it did before automation, and companies also benefit from large state and local tax incentives.
A mechanized economy doesn’t work for rural places, said Haggerty from the Center for American Progress, leaving behind rural communities that no longer benefit from the timber industry.
“Companies are able to come in and extract wealth from the rural economy without leaving benefits behind,” Haggerty said. “The industry doesn’t support local communities or schools anymore.”
The Search for A Permanent Solution
Haggerty advocates for a new approach — a permanent trust to stabilize funding for rural forest communities.
“A trust makes sure that communities have the resources they need to provide essential services and to plan for the kinds of assets and amenities that they need to help grow their economies and diversify again,” he said. For rural communities, the ability to provide basic services like public schools and nutrition programs is essential. Without it, they risk falling deeper into poverty, with less ability to escape.
An endowment model would establish a permanent trust funded by ongoing receipts from commercial activities on public lands, including the traditional revenue sharing. Under this model, the money earned from timber revenues would be held in perpetuity and invested to generate income, which would then be paid to the rural forest counties from which the resources are being extracted.
The idea behind the endowment model is simple: to invest the existing wealth from non-renewable resources in a way that continues to support these communities without further depleting the land or relying on inconsistent government funding. “It’s not asking the taxpayers for permanent appropriations, and it’s not adding to the debt. But it gives counties and schools predictable payments that they can rely on,” Haggerty said.
To guard against corruption or mismanagement, Congress could authorize an independent entity to establish and manage the trust, one managed by a board that includes the county representatives who rely on the funds, Haggerty said.
Another concern is market volatility. “If you set this thing up in 2007, you would’ve had a huge crash right away,” Haggerty said. “But that’s why you have an investment strategy and a distribution system to try to protect it.”
The creation of a permanent trust is not a new concept. States and counties with large national resources economies, especially those dependent on fossil fuels, have implemented similar models with success.
If Congress had established such an endowment in 1908, instead of the revenue sharing program, today it could distribute $3.2 billion to forest communities and schools, a sum three times larger than the largest distributions from revenue sharing in the 1970s — and 213 times larger than the funds distributed in 2017. Even with a more recent timeline, if an endowment had been created in 2000, instead of the SRS program, it would have been worth $1.3 billion by 2018 and would distribute $33 million to these communities.
The idea has been introduced in Congress several times, with bipartisan support from Senators Ron Wyden (D-OR) and Mike Crapo (R-ID), as well as endorsements from the National Forest Counties and Schools Coalition and the National Association of Counties. Despite this support, the proposal has not gained enough traction to pass.
“We’re always in a reauthorization crunch [for SRS],” Haggerty said. “But by the time you actually start talking about a permanent solution, it’s time to reauthorize again.”
One of the key hurdles is Congress’ reluctance to create a solution that would reduce their control over the funding process. “Congress likes swooping in every year or two or three and saving the [SRS] program,” Haggerty said. “If you set up an endowment and have mandatory spending associated with it, Congress has less to do.”
Opposition also comes from within the forest counties themselves, some of which, like Skamania County, continue to push for increased timber harvests and a return to the old revenue sharing model. Environmental groups, too, have their concerns, as many oppose using timber revenue to fund an endowment, citing the environmental impact of incentivised logging.
Despite these challenges, the endowment model presents a promising solution to the ongoing struggle for stable, reliable funding for schools in rural forest communities. For superintendents, an alternative to the instability of SRS would be a welcome reprieve.
In the meantime, rural superintendents are doing what they can to support their students and communities. “It’s difficult, but you signed up to lead, you didn’t sign up to be a victim. You don’t make excuses to your community,” Trinity Alps superintendent Jamie Green said.
“We’re working as hard as we can for our students. We cannot fail.”
Claire Carlson and Lane Wendell Fischer wrote this article for The Daily Yonder.
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