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Committee endorses transit tax hike, sends plan to full council

February 21, 2017

A proposed Marion County transit tax—one that would pay for more buses, more frequent pickups and rapid transit routes—moved closer to reality Tuesday after a City-County Council committee agreed to move the issue forward for full council debate next week.

With a 5-2 vote, the council's Rules and Public Policy Committee endorsed raising local income taxes 0.25 percentage point, a move that would cost a resident with $100,000 in taxable income $250 per year. The full council is set to discuss and vote on the plan Monday.

The committee vote came after Mayor Joe Hogsett’s top adviser urged members to say yes—the first time the Mayor’s Office had expressed an opinion publicly about whether the tax increase should pass. Chief of Staff Thomas Cook told councilors that Marion County residents want "genuine transformative investment" in transit.

The tax increase is projected to generate at least $54.4 million annually starting in 2018. That money would be used to improve IndyGo bus service by adding more buses, hiring more drivers, and building and operating three rapid-transit bus lines.

Marion County voters authorized the tax increase in November, but it won’t go into effect without approval from the City-County Council. President Maggie Lewis, who also chairs the Rules and Public Policy Committee, said she feels optimistic the tax increase will pass at Monday's council meeting.

"I think we'll get over the finish line," Lewis told IBJ.

IndyGo says the extra tax money is the only way it can improve local bus service. And on Tuesday night, several Marion County residents—who were limited to two-minute comments—urged councilors to vote yes. Some said they rely on bus transportation as a primary means of transportation.

But some who spoke said the IndyGo plan doesn’t go far enough or relies on technology that will be outdated by the time upgrades are finished.

And others, including Lee Lange, complained about the rapid-transit route called the Red Line, whose first phase will run from East 66th Street and College Avenue south to the University of Indianapolis. The plan calls for the creation of a dedicated bus lane in the middle of College Avenue as well as elevated bus stops, which Lange said will eliminate some parking.

But IndyGo plans to build and operate the Red Line even without the tax increase.

IndyGo officials are hoping to receive a $75 million Federal Transit Administration grant, which would cover most of the cost of building phase one of the Red Line. Federal transit authorities recommended IndyGo for the funding a year ago, but the grant is tied up in congressional and administrative transitions.

IndyGo says it can still make its planned system improvements if the grant falls through—assuming the tax hike passes—but the upgrades will be slightly scaled back and won’t be implemented as quickly. The city would also have to issue a larger bond to finance the project.

IndyGo President and CEO Michael Terry said after the vote that he appreciated the council's approach to the issue. Monday's meeting was one of several gatherings held in recent weeks where council members and members of the public could ask questions and express opinions on the transit plan.

"We're just pleased that the council's been very deliberative in this process," Terry told IBJ.

To pass the full council, the proposal must gain yes votes from at least 13 of the 25 councilors. There’s a good chance that will happen: To date, 12 councilors have indicated they plan to vote for the tax.

Another four have said they plan to vote against the tax, and as of last week, five members said they had not yet made up their minds. The remaining four have not made public statements and have not responded to IBJ inquiries.

The council could vote to pass the full 0.25 percent tax or it could approve an increase in a smaller amount. It could also postpone action or take no action at all.

At Tuesday night’s committee meeting, councilors Monroe Gray and Jeff Coats voted no. Mike McQuillen left before the vote but previously expressed his support for the proposal. Yes votes came from councilors Blake Johnson, Scott Kreider, Vop Osili, Leroy Robinson and Lewis, who introduced the proposal.

Gray had questions about whether the upgraded system would generate enough in fares to meet the projections the plan relies on.

Osili said he feels "far more comfortable" about the transit plan now than he did a week ago. Conversations with IndyGo representatives answered questions he had about the timing of the Red Line and other matters, Osili said.

The Transit Drives Indy Coalition—a group that includes the Indy Chamber, MIBOR Realtor Association and Central Indiana Community Foundation—lauded the committee’s vote.

“We are one meeting and final vote away from allowing this plan to become a reality for Indianapolis,” Kelli Mirgeaux, the group’s grass-roots coordinator, said in a statement after the meeting.

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