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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowThe Indiana Senate approved a bill this week that would strip tax revenue from IndyGo and hinder its ability to pursue its planned expansion of bus rapid-transit lines.
We oppose the bill and believe it to be a mistake that could have severe consequences for a bus system that is struggling despite the significant need for its services.
Senate Bill 141, authored by Sen. Aaron Freeman, R-Indianapolis, would withhold 10% of local income tax revenue from IndyGo until it meets a private fundraising threshold established in a 2014 law. It also would prevent IndyGo from moving forward with expansion projects, including the planned Blue and Purple lines, until it secures the required private funding.
That 2014 law authorized a 0.25-percentage-point increase in the city’s income tax rate to fund IndyGo operations and new services, with approval from the City-County Council and Marion County voters. The law also said IndyGo would be required to provide a 10% match of that new income tax revenue, raised only from sources that were not fares or taxes.
That latter provision is what is at issue now. It was added to the legislation in part because some lawmakers believed the business community, which was lobbying heavily for the bill’s passage, should contribute something to the effort to improve Indy’s bus system.
Executives from some of the region’s biggest employers testified that employees needed a strong bus system to get to work and that improving IndyGo would help the economy. Why then, some lawmakers reasoned, shouldn’t those same executives pony up cash to help fund the system? So they added the 10% private match to the bill—but with no punishment if IndyGo never raised a dime.
It’s likely that transit advocates and business leaders at the time didn’t worry much about the provision. Without a penalty, the match likely seemed more like a goal than an actual requirement.
Three years after the bill passed—and after votes by the City-County Council and Marion County voters—the tax increase went into effect. Today, it is generating roughly $60 million per year, which means IndyGo should be raising about $6 million in private donations annually to be in compliance.
It has not done so. In fact, the agency has raised almost nothing and has claimed that’s in part because it needed time to set up a foundation to do the fundraising.
We suspect that IndyGo never thought anyone would pay attention—maybe even remember—that requirement. But Freeman did. And we understand his frustration that a provision that helped the bill win passage has been all but ignored.
Nevertheless, we firmly believe the private match was never a good idea. And we don’t think enforcing it now does IndyGo, its riders or the city of Indianapolis any good.
Therefore, we urge the House to kill Senate Bill 141. Or better yet, rewrite the bill to strike the 10% match from the law and put the issue to rest.•
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This bill correctly adds an enforcement mechanism that should have been included in the original legislation.
Good call Clint. It’s not a punishment. The requirement is clearly stated in the article.
-“Senate Bill 141, authored by Sen. Aaron Freeman, R-Indianapolis, would withhold 10% of local income tax revenue from IndyGo until it meets a private fundraising threshold established in a 2014 law. It also would prevent IndyGo from moving forward with expansion projects, including the planned Blue and Purple lines, until it secures the required private funding.”
The bill is a bad bill. The bill incorrectly adds a requirement for which no justification or rationale is provided. Any bill by legislators should expressly describe the objective and benefits. Why was the bill drafted and what benefits does the bill create.
The bill is a severe disbenefit to Indianapolis and IndyGo users and furthermore is a unjust workaround to thwart the will of the people who passed by 59.4% a referendum to improve transit, a referendum which clearly defined the improvements to be made.
The requirements of the bill do not effect accountability nor improvement in transit service delivery. Fundraising does not equate to good transit. The purpose of the 0.25% tax is to provide a stable source of funding to allow transit to operate effectively and efficiently; the stable source allows IndyGo to compete effectively for federal transit grants which are highly unlikely to be made to agencies with unstable funding.
This bad bill creates instability in funding and does so unnecessarily as the transit tax is sufficient to fund improvements and operate the system. Why would anyone be inclined to donate to the IndyGo Foundation when the agency has a tax – one this will be withheld unnecessarily. Now, IndyGo must pay for staff to beg for money — whereas better use of these dollars would be providing transit service, what a transit agency should do.
Consider the impact: the fundraising staff must collect $6 million annually, a large sum, as a criterion for IndyGo to improve service. This $6 million opportunity cost now imperils $177 million in grant funds — grant means a return of dollars to Indiana from the Federal Transit Administration — funds are competitive and if FTA learns of this State tomfoolery, the grant could be rescinded and monies redistributed to other cities. And, if the Red Line cannot be operated according to at grant requirements, grant funds used to build the line will have to be reimbursed to FTA. FTA may look more closely at other projects in Indiana given that this bill shows state agencies as unreliable grant recipients (based on the local financial commitment criterion for grants).
This verbiage of the bill is poor, the objective of the bill not stated. No agency collecting a transit tax in the US is subject to such a ridiculous ruling. IndyGo projects reflect tone of the most cost-effective bus rapid systems in the nation — that’s why the grants are pending from the Federal Transit Administration. Yet the State is ready to toss all — and for what good reason? Why not just fine IndyGo. Better yet, why not just dump this bill.
Why are other projects not subject to a fundraising requirement? Why not the DOT for roadway projects? This does not make sense. Again, one reiterates, voters approved the tax for transit improvements. The tax is sufficient to make them and to leverage grants. So far, Red Line received about 77% (of $96 million) construction cost from FTA grant. The pending $177 million grant will cover 50% of cost of Purple and Blue line. But, throw these grant dollars away for $6 million fundraising/donation criterion? This is not a fiscally responsible act.
The bottom line is that the original legislation should not have included the poison pill rider. If the objective is accountability, then transit-specific performance measures should be set.
Allow the system to improve within its transit funding limits, as voters approved. IndyGo is decades behind other cities for transit delivery. Take a look at Salt Lake, Phoenix, Grand Rapids, Louisville, and Dayton as peer cities and note the better service. Cheapest is not best quality and investment is necessary to provide an attractive transit product — more frequent, travel time reliability, convenient connections. Fiscal responsibility is laudable and should remain a key guideline for public agencies. The fundraising requirement could be maintained to enhance revenues or be an additional sources of mitigation funds to assist businesses during construction, subsidize fares for target populations, or accommodate trips in areas with little or infrequent service, but this should not be a criterion for advancing transit improvements.
+1
Republicans are working hard to “own the libs” and it shows in the 2014 bill and now this new one.
I hear strong criticism of IndyGo, but do you realize the long term plan they laid out is less then 1/4 complete? The whole BRT system is going to get a huge boost when they reach the airport, but that is getting strong pushback from a “Indianapolis Republican” that only got his position in a strongly gerrymandered district.
I have the privilege of seeing INDY GO’s failed efforts every day watching the route between Trader’s Point and Community North. Every hour between 7AM and 10PM, this lack of achievement is visible to everyone over ten times an hour . Most buses are 10% to 20% full, many are empty. Has INDY-GO realigned it’s route or schedule? 10% maybe. They are still driving these articulated buses when half sized buses would do, through routes that do not or not at all, effectively serve citizens without cars.The buses drive at 20MPH or 50 MPH, so they don’t bunch up. In the last 6 months, I’ve seen an increased number of people waiting, many at stops without a shelter; but that is not a sign of fiscal health, most of them get free passes. It is a system of last resort. The busiest stops are surrounded by fast food cups and trash, they do not provide enough trash receptacles. One person may pick the area up once a month. They are a blight on our side of town. Until INDY GO does a realistic cost / benefit analysis on all of their routes; all of their good intentions will fall short. These millennial snowflakes who run Indy-Go, when questioned by CCCouncil members at Indy-Go meetings, just explain things away as “well, it seems like it would be a good idea. Thinking and achieving are two different things. Until Indy Go achieves better results, they should not be given any more funding. Steven Pettinga