Morgan, Hendricks counties see sharp rise in poverty

from The Indianapolis Star

Dramatic increase from '05 to '06 adds to strain on medical, social services in the suburban communities

By Will Higgins
will.higgins@indystar.com

Under the old model, the suburbs were where you moved after you'd achieved a measure of success. But now there's trouble in paradise.

A deeper look at statistics released last week by the U.S. Census Bureau shows that the number of people living below the poverty level nearly doubled in Hendricks and Morgan counties in 2006.

That translates to increased strain on food pantries and other social services, millions of dollars in unpaid medical bills and a rise in home foreclosures.

Hendricks and Morgan counties are two of the fast-growing so-called doughnut counties, the once-pastoral land surrounding Indianapolis that today is considered the burbs. Hendricks County's population is up 26 percent since 2000. Morgan's population shot up in the 1990s, then slowed to a still-healthy 5 percent from 2000 to 2006.

Both are largely bedroom communities, so the reasons for the poverty trend have more to do with job losses elsewhere than the economics of either county.

In Hendricks, the percentage of people living below the poverty line rose from 4.4 percent in 2005 to 7.3 percent in 2006. In Morgan, the proportion more than doubled, from 4.9 percent to 10.1 percent.

Statewide, the poverty rate also climbed, though not nearly as dramatically. It rose from 12.2 percent in 2005 to 12.7 percent in 2006, a one-year jump of about 37,500 people, bringing the state's total to 778,000.

"People are having a tougher time paying their utility bills," said Sharon Bolin, a welfare claims investigator with the Washington Township trustee's office who helps administer poor relief in Martinsville, the Morgan County seat. "Their rents are so high that when they do find jobs, the fast-food (restaurants) and all, they can't afford to pay the rent and the utilities. Many of our clients are working and struggling."

"We serve 270 households a month," said Alice Cordes, who runs the Churches in Mission food pantry in Mooresville. "A year ago, it was 150."
Kim White, a mother of three, calls the pantry a "blessing."

"They have helped with the rent, utilities, food, clothing, and given us Christmas presents," she said.

The charity has helped Shannon Haney in a similar way, coming up with the money last week to prevent her electricity from being disconnected and for some back-to-school supplies for her three children. In late August, her husband found a job, but it's only part time.

"The economy down here isn't very good," said Doug Kirsop, who runs a homeless shelter in Martinsville.

The county-owned medical centers in Hendricks and Morgan counties are feeling the sting, too, saying that more people are having trouble paying their medical bills.
Hendricks Regional Health, based in Danville, had $3 million in bad debt in 2006, up 50 percent from the previous year.

Morgan Hospital and Medical Center's bad debt levels have risen steeply for several years, climbing from $4.9 million in 2003 to $11 million last year, said Chief Executive Tom Laux.

"We see it in both bad debts and in charity care," Laux said. "We treat everybody who comes to our door. . . . We're getting more people unable to pay their portion of the bills."

Real estate foreclosure rates are up, too, said Gina Marsiglio, broker-owner of the RE/MAX Crossroads agency in Plainfield. "I think a lot of people got into homes who just weren't ready to get into homes."

Phil Powell, a professor with Indiana University's Kelley School of Business who follows Central Indiana's economy, said the downturn in Morgan and Hendricks stems from their recent influx of people with modest incomes and modest education levels.
"When the economy hiccups, they (those with modest incomes) get hit first," said Powell, who lives in the Hendricks County town of Brownsburg.

The poverty rate in prosperous, well-educated Hamilton County, by comparison, fell during the same period, from 4.4 percent to 3.9 percent.

Harold Gutzwiler, Hendricks County's economic development director, said the problem didn't start in Hendricks County.

"We haven't had plant closures in the past year," he said. "We have lots of distribution centers going up."

Roughly half of Hendricks County's residents hold jobs elsewhere, mostly in adjacent Marion County, he said.

In Morgan County, 60 percent of residents work outside the county.
Jeff Quyle, a county commissioner there, said business closings in Marion County have had a large and negative effect on Morgan.

"Olin Brass, the Chrysler Foundry, United (Airlines' maintenance facility). All those hits taken in Indianapolis, that's a decade's worth of explanation. But why the one-year jump? I don't know," he said.

Not that Morgan County is booming. The county is still feeling the effects of the sale of Harman-Becker Automotive's parent company to private equity buyout specialists Kohlberg Kravis Roberts & Co. and GS Capital Partners. Harman had been one of Martinsville's largest and best-paying employers.

Dozens of layoffs followed the sale.
"The Harman people, a lot of them are still getting unemployment," Bolin said. "But when that runs out, it's very possible we'll see even more people needing assistance.
"What's going to happen to us? I don't know. I think about it a lot."