Socioeconomic and Fiscal Study of Rural Indiana

Rural Counties Face Unique Challenges in Recovering from Recession

The economic recession that occurred in our nation over the course of the 2008-2009 period wreaked havoc in many communities across the United States. Not only did the housing market tumble, but the unemployment rate skyrocketed, and job creation stopped dead in its tracks. Adding further pain was the decline in household income and the uptick in poverty levels for increasing numbers of families. Like most states, the Great Recession hit was a painful period for many Hoosier families and communities.

Over the course of 2015 and 2016, the social and economic conditions of the state showed steady improvement. Housing construction and home sales began to recover. The rate of unemployment has been falling, job expansion has been on the rise, poverty levels have been declining and population growth has returned to some parts of the state. Despite the signs that our state and nation have finally turned the corner with regard to the damaging effects of the Great Recession, the fact remains that major challenges persist for our state, especially for its rural counties and communities. With the exception of rural counties that are located in close proximity to most metropolitan areas, many rural areas continue to experience population decline, job losses in manufacturing and agriculture (the traditional drivers of the economy of these areas), limited improvements in the human capital credentials of the adult workforce, persistence of high rates of adult and child poverty and more. Added challenges are the limits on local government investments in infrastructure, broadband, housing, community facilities, public education and more as a result of an inadequate revenue base or statutory restrictions on revenue growth.

Purdue’s Socioeconomic and Fiscal Study: Assesses Rural Indiana

Purdue’s Socioeconomic and Fiscal Study was designed to take a careful, systematic and unbiased assessment of rural Indiana. A team from Purdue University’s Center for Regional Development, coupled with professionals from the Department of Agricultural Economics and Purdue Extension assembled and analyzed a wide array of quantitative and qualitative data in order to better understand past, current and emerging trends and issues in rural Indiana.

The following outlines the specific activities that the Purdue University team undertook in partnership with the Indiana Office of Community and Rural Affairs. There were two components to this study: (1) to create a socioeconomic profile of counties in rural Indiana and (2) assess the challenges that local governments face as a product of Indiana’s local government revenue system.

Socioeconomic Profile of Rural Indiana: Conditions and Trends

This portion of the study included the following:

Examination of the Rural Definition
Exploration of the Demographic Features of Rural Indiana
Tracking Economic Conditions in the State’s Rural Areas
Studying the Rural Labor Force and its Journey to Work Characteristics

Indiana’s Local Government Revenue System: Examining Fiscal Challenges for Rural Areas

This portion of the study included the following:

Examination of Indiana’s Local Government Tax System for Rural Communities
Inventory Local Government Revenue Streams in Rural Indiana
A Study of Tax Increment Finance’s Effect on Infrastructure Investments

Study Outcomes

Website: After conducting this study, Purdue developed a website that serves as a one-stop shop for socioeconomic and fiscal data on rural Indiana. The site can be accessed at: https://pcrd.purdue.edu/ruralindianastats/
Topical Reports: The Purdue team prepared a series of information briefs that build on the data resources that were compiled as part of this proposal.
Educational Program for Local Elected Officials: The Purdue Team developed and taught an educational program for local elected officials based on the findings of the study. The programming focused on the revenue-raising options available to local governments and the implications of these tools for the levying unit, overlapping governmental units and taxpayers.