A group of property owners in downtown Indianapolis plans to ask state lawmakers to either undo or make changes to a new provision in state law that allows the city to impose a fee on property owners in the Mile Square to fund improvements to downtown and the operating costs of a homeless shelter.
Attorney and former Indiana House speaker Brian Bosma, speaking on behalf of an organization called DefendDowntown.com, which includes commercial businesses, restaurant owners, residential homeowners and the influential Indiana Apartment Association, told IBJ that the coalition is asking the Legislature to reconsider the concept when it convenes in January.
The group previously had hinted that such an effort was possible, but Bosma’s comments this week are the first definitive pronouncement.
It’s unclear, however, if lawmakers would be open to rolling back the Mile Square tax, which was slipped into the 2023 state budget by Republican fiscal leaders without public input.
“I think this is a big ask to tell the legislature that they ought to undo that which they barely got done,” said Rep. Ed Delaney, D-Indianapolis. “The ink is hardly dry on this measure.”
Bosma, spokesman for Defend Downtown, has emerged as the leading voice for opponents of the taxing mechanism, though he said he hasn’t decided whether he will lobby for the cause.
The Democratic-controlled Indianapolis City-County Council set the wheels in motion for the tax on Monday when it voted 19-5 along party lines to create an economic enhancement taxing district within the boundaries of the Mile Square.
But in a recent op-ed for IBJ, Bosma, a Republican, argued that “the ultimate decision on whether to implement the tax rests with the Legislature.”
Bosma, who served in the Indiana House from 1986 to 2020 and was speaker for 12 years, still holds influence at the GOP-controlled Legislature, said Andy Downs, professor emeritus of the Mike Downs Center for Indiana Politics at Purdue University Fort Wayne.
“It can’t hurt to have Brian Bosma on your side,” Downs said. “He clearly knows the process. He clearly has connections in the world of politics.”
Bosma said Monday’s council vote was “just one step in an ongoing process” and that he looks forward to the issue “getting publicly debated” in the 2024 legislative session.
“DefendDowntown.com has heard from numerous stakeholders questioning why the businesses and residents who struggled through the past years, but remained downtown, are now being forced to shoulder the burden of this increased tax for the entire city,” Bosma told IBJ.
Gov. Eric Holcomb, whose office was in discussions with legislative leaders about the concept during the 2023 legislative session, said he expects there to be more conversations in the upcoming session.
“I’m in support of the concept, but the devil is in the details,” Holcomb said. “The legislature has some questions as well, and so it will be rehashed, I’m sure, in this coming short session, and we’ll be a part of that.”
Under the proposal, single-family homeowners would pay an annual $250 flat fee starting in 2025. Based on a formula in the ordinance, owners of commercial properties are expected to 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 bear the largest portion hit by the new tax, contributing $1.87 million of the $5.5 million expected to be generated annually.
The revenue would continue Downtown Indy Inc. enhancement efforts begun a year ago with $3.5 million in federal COVID-19 relief money.
Monday night’s vote means the city and state must create a governing board to oversee the new district, which is designed to have four members appointed by Statehouse leaders (who are Republicans) and an equal number appointed by city leaders (who are Democrats). That board would ultimately decide whether to impose the tax on Mile Square property owners.
CORRECTION: This story has been changed to accurately reflect the years Brian Bosma served in the Indiana House of Representatives. He was first elected in 1986 and served through 2020.