Indiana House Speaker Todd Huston said he wants a public hearing on a last-minute law that was slipped into the state budget last year and set into motion a new tax on downtown Indianapolis property owners in the Mile Square.
That hearing would come in the next few weeks on a new piece of legislation that proposes doing away with the new tax and is slated to be considered by the House Ways and Means Committee.
Huston, a Republican from Fishers, did not endorse the legislation but said citizens deserve a chance to weigh in on the concept at a public committee hearing after being denied the opportunity last year.
“Frankly put, [the tax proposal] should have probably gone through the [committee] process like every other piece of language normally goes through,” Huston told IBJ on Tuesday. “This is our chance to do that this year.”
House Bill 1199, a one-page piece of legislation, would abolish the economic enhancement district that the Indianapolis City-County Council voted in December to establish. Under the law passed last year, the council’s action clears the way for the creation of a state-city board that could impose a fee on Mile Square property owners to help pay for a low-barrier homeless shelter, homeless outreach, downtown cleanliness initiatives and safety ambassadors.
The bill was released Monday night and is authored by Rep. Julie McGuire, a lawmaker from southern Indianapolis who was elected in 2022, and co-authored by Rep. Mike Speedy, R-Indianapolis, and Rep. Jeff Thompson, a Lizton Republican and chair of the House Ways and Means Committee.
Thompson said he plans to schedule the bill for a committee hearing in the coming weeks. “We’re going to look at it, hear it and talk about the results,” he told IBJ.
McGuire told IBJ she filed the bill after hearing concerns about high property taxes from property owners and groups such as the Indiana Apartment Association. The law setting up the new tax was passed by the Legislature with the support of the Indy Chamber and Downtown Indy Inc., which currently provides many of the services that the tax would pay for with federal funds from the American Rescue Plan Act provided by the city.
McGuire argues that private donations should pay for the services.
“Downtown Indy Inc., is a nonprofit, and if they want to raise funds—if all these businesses want it like the Chamber is talking about—they can write a check to Downtown Indy and do this work,” McGuire said.
Opponents of the tax have an influential ally in former Indiana House Speaker Brian Bosma.
Last month, Bosma told IBJ that he was serving as the spokesperson for DefendDowntown.com. The website describes the organization as a “group of downtown residents and business owners who live or operate in the Mile Square” and oppose the tax, but it doesn’t provide a list of group members.
Bosma is an attorney and registered lobbyist. But as of last month, he said he hadn’t decided if he would lobby on behalf of DefendDowntown.com. In the meantime, a Virginia-based group called the American Jobs and Growth Fund has been paying for Facebook ads on behalf of the opposition group that encourage people to sign a petition to help stop the tax.
While the proposal to undo the tax appears to have legs in the House, its reception in the Senate is more muddled.
Sen. Kyle Walker, the Lawrence Republican who worked with the Indy Chamber to get the tax mechanism inserted into the 2023 budget, told IBJ that he doesn’t support McGuire’s bill as currently written.
“I would be happy to entertain and support a bill that would perhaps codify further guardrails on the legislation, but I don’t support any repeal in full,” he said.
Sen. Ryan Mishler, the Mishawaka Republican who chairs the Senate Appropriations Committee that would likely be assigned to consider the bill if it passes the House, said he hadn’t had a chance to review the legislation.
“I have no idea what it does and what they’re trying to do, but I’ll find out,” Mishler said. “Let me do a little homework on it.”
Senate President Pro Tem Rod Bray declined through a spokesperson to comment on the measure.
Opponents of the tax argue that it will impose a financial burden on downtown property owners who are already struggling to fill vacant office, residential and retail space.
But supporters say the taxing district is the best way to continue funding downtown cleanliness and improvement efforts provided by Downtown Indy after the city’s $3.5 million infusion of ARPA funds run out this year.
Adam Burtner, vice president of government affairs at the Indy Chamber, said he was not surprised by the legislation but he was disappointed. He pointed out that none of the three lawmakers who authored the bill represent legislative districts that include the Mile Square.
“For this to be potentially repealed by folks that don’t have a constituency in Mile Square is problematic in the least,” Burtner said.
On Friday, the Indy Chamber and Downtown Indy launched their own website, Care for Mile Square, that highlights the potential benefits of an economic enhancement district and takes on claims made on the Defend Downtown website.
In December, the Indianapolis City-County Council voted along party lines to create the economic enhancement district, and the measure was later signed into law by Mayor Joe Hogsett.
Under the ordinance, single-family homeowners would pay an annual $250 flat fee starting in 2025. Owners of commercial properties would pay nearly 0.17% of their properties’ gross assessed value, or about $1,681 per $1 million in gross assessed value.
Apartment owners as a group would be hardest hit by the new tax, contributing an estimated $1.87 million of the $5.5 million expected to be generated annually. The association represents 280,000 rental units throughout the state, including 5,000 in the Mile Square, according to spokesman Charlie Tinkle.