A mass-transit bill for metro Indianapolis cleared a key Senate committee Tuesday morning, but left open many questions about how such a system would be funded.
The bill allows Marion County and surrounding counties to hold referendums on whether to increase their local income taxes to support the $1.3 billion system. The bill also calls for counties to adopt corporate income or employment taxes and requires fares to cover 25 percent of the operating costs. It also was amended to include a ban on using light rail.
The corporate income tax provision is a new wrinkle in the overall financing plan, and IndyConnect Executive Director Ron Gifford admitted that it’s not clear how it would all come together.
“There are questions about the mechanism, about the policy, about the rate,” he said.
But supporters were relieved to have the proposal clear the Senate Tax and Fiscal Policy Committee, which last year sidelined the initiative for summer study. The committee voted 8-4 to send the bill to the full Senate. Several members, including Sen. Mike Delph, R-Carmel, said they still had reservations, but were willing to keep the bill alive.
Sen. Pat Miller, R-Indianapolis, the author of Senate Bill 176, said it essentially allows local communities to bring transportation to their areas.
“It will probably be amended a number of times as it moves through the process,” she said.
The corporate-tax requirement drew opposition from Americans for Prosperity and the Indiana Manufacturers Association, but committee Chairman Brant Hershman, R-Lafayette, defended it as a matter of fairness. Businesses subject to the individual income tax would see a hike because of mass transit, and he said, “Larger corporations should participate as well.”
IndyConnect hopes to see a referendum about public transit on local ballots this November.
The Senate committee accepted an amendment, filed late Monday, that included a ban on the use of light rail and an unrelated provision for a city of Indianapolis public works project.
The light-rail component of the plan drew fire last year because of its potential costs, but Gifford said it might be a moot point. Planners are looking at the best technology to use on the northeast or "green" line, running from Noblesville to downtown, and might decide bus rapid transit is the better option, Gifford said.
Another provision would allow the mayor of Indianapolis to raise money through bonding without the City-County Council’s approval. Mayor Greg Ballard last summer unveiled a plan to borrow up to $135 million for a host of upgrades, including sidewalks, but the council never acted on the plan.
The amendment to SB 176 allows the Indiana Finance Authority to issue bonds and pledge the proceeds to the city, which would pay back up to $7.5 million a year through excise surtax and wheel-tax revenue.
Ballard testified on behalf of the mass-transit bill.
Spokesman Marc Lotter said the mayor's office learned of the amendment Monday night.
"It is clear to me that, similar to Mayor Ballard, Senate Republicans believe we can improve Indy neighborhoods by investing in better streets, sidewalks and transit," he said.