Senate committee narrowly approves bill that strips funding from IndyGo

Indiana lawmakers on Thursday narrowly voted to push forward a bill that would strip funding for local public transportation and hinder IndyGo’s ability to pursue its planned expansion of bus rapid-transit lines.

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, like the Blue and Purple lines, until it secures private funding.

The 2014 law authorized a 0.25-percentage-point increase in the city’s income tax rate to fund IndyGo operations and new services—such as the Red Line—with approval from the City-County Council and Marion County voters. The law also said that IndyGo would be required to provide a 10% match of that new income tax revenue, raised only from private sources, not fares or taxes.

The tax went into effect in October 2017 and is generating about $60 million per year, which means IndyGo should be raising $6 million in private donations annually to be in compliance.

But IndyGo didn’t establish a not-for-profit foundation to raise money until June 2019, and since then, it has not come close to raising enough funding. Freeman says he’s trying to hold IndyGo accountable.

Freeman filed similar legislation in 2020, but the bill died on the final night of the legislative session.

IndyGo officials argue that federal grants the system receives should count toward its fundraising total. If those were allowed, the agency would be in compliance.

The law says the revenue raised can’t be from “taxes or fares” but does not specifically say “private donations.”

The bill’s co-author, Sen. Mike Young, R-Indianapolis, said the intent of the law is clear, though, and the Indiana Office of the Attorney General, at Freeman’s request, weighed in and said the federal grants should not be considered private donations.

IndyGo officials have also said that if the bills were to pass, more than $177 million in federal funding dedicated for the Blue and Purple lines would be in jeopardy because lack of funding could cause the agency to have to delay and/or redesign the projects.

The Senate Appropriations Committee approved the bill 7-5 on Thursday, after Sen. Phil Boots, R-Crawfordsville, changed his vote from “no” to “yes” to allow the bill to move to the Senate.

Boots said he doesn’t know how he’ll vote on the Senate floor.

Senate Appropriations Chairman Sen. Ryan Mishler, R-Bremen, said he didn’t decide to allow the committee to vote on the bill until late Wednesday night.

Mishler said the letter from the Attorney General’s Office affected his decision.

“I feel like I’m asked to be a judge in this case, and I’m not even a lawyer,” he said.

Sen. Fady Qaddoura, D-Indianapolis, said he believes the bill will hurt IndyGo and the city, and he doesn’t think it addresses the problems some residents have with the proposed Blue and Purple lines.

“I think this is a very bad piece of public policy,” Qaddoura said.

Sen. Karen Tallian, D-Portage, said this is a local issue that local representatives can take care of, and there are other avenues for holding someone accountable for not following a state law.

“We’re not a court,” Tallian said.

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43 thoughts on “Senate committee narrowly approves bill that strips funding from IndyGo

    1. Scott, there is NO agreement and IndyGo didn’t sign anything. The yahoos in the General Assembly depend on ignorant voters to keep returning them to office.

  1. This bill should be considered as a “correction” bill. The 2014 law should have contained a mechanism to force IndyGo to live up to its responsibilities. The remedies proposed seem reasonable.

    1. Hopefully, the full Senate will reject this misguided piece of trash legislation, and if not, I trust Holcomb will veto it. The original proposal to require a PUBLIC TRANSIT system to fundraises was and IS BS. No system in the world has such a nonsense requirement–it is a public service and should be funded solely through tax dollars and fares. I have already contacted the federal DOT and asked them to enforce current federal law and hold states like Indiana who receive federal funding accountable for for promoting transit inequity and discriminatory transportation policies. I would love to see the state get stripped of some of its federal funding for highways–it would be a fair trade.

    1. Bus rapid transit- a 1960s solution to a 21st century mobility problem. We should be leading the way on transit by creating a countywide UberPool
      System that takes you door to door, tells you when you’re picked up and dropped off, and builds a detailed data base of who goes where when. But no, we’re going with the archaic solution. Let the 40 CEOs who signed the Indy Chamber letter pay the 10% share since they’re so righteous.

    2. Andrew – The 60s solution to mobility problems was interstates. If you’re advocating for Indianapolis to pay for everybody’s Ubers, I assure you that it would be far more expensive than BRT.

  2. Funding public services with donations seems like great public policy. That IN37 upgrade? That final leg of I69? The 465/69 project? Lets make all of those fundraise. Prisons? Seems like corporations would love to donate to keep criminals off the streets. Schools? If residents want good schools they should be willing to pony up 10% of their costs in donations.

    But to be serious, funding essential public services with donations is a ridiculous idea. It’s why we pay taxes and why Marion County voted to increase their own taxes to pay for this and why other communities vote to support property tax increases in school referendums. And if you don’t buy that argument….the philanthropic capacity of communities aren’t infinite. If a public entity like IndyGo is in the market for $6m a year in donations, its going to be competing against non-profit fundraising. I’d like to propose a bill that Senator Freeman reimburse out of pocket every dollar homeless shelters and food pantries and job training and cultural non-profits lose because the donations are going to a publicly supported entity like IndyGo.

    Want a say in how Indy spends its money Aaron? Run for mayor.

    1. The final leg of I69 is the most scandalous infrastructure project in the entire state. It costs hundreds of millions, maybe billions of dollars and it connects Indianapolis to what? The very few people who live in Evansville? There isn’t a big city along the route until Memphis, which will do nothing more than subsidize FedEx. What a joke. That should be funded by FedEx and FedEx alone.

    2. In addition to Robert’s point, I-69 was pitched as state-to-state highway project. But nearly every other state has basically indefinitely delayed their expansion. Apparently it isn’t all that important to many others.
      But hey, we’ve got some INDOT contractors who need to stay employed.

    3. I-69 is designed to go from Detroit to Houston. Indianapolis to Evansville is a small portion.

      Besides, the final leg was needed regardless of the rest of the project … due to growth in the center grove area, SR37 needed an upgrade to interstate standards from SR144 to 465.

    4. Joe – The northern part of 69 doesn’t even go to Detroit, it swings through Lansing and then goes way north of Detroit. And I doubt it will be finished in the next 20 years. If SR37 needed to be upgraded, INDOT should’ve upgraded SR37. Train freight will always transport goods cross-continent more efficiently than trucks. All this “Canada-Mexico” nonsense I69 is lipstick on a pig whose only obvious purpose seems to be to connect FedEx’s two major hubs.

  3. Would that be the same AG office that hired the State Ethics lawyer who provided the opinion that the AG can continue to moonlight at a state regulated entity while serving as the AG?

    I can understand the thinking here, though…as legislators, they are all obligated to raise from private funds the vast amounts of money required to keep them employed in these coveted positions. They are bought and paid for by their special interest masters, pretending to be acting on behalf of and for the good of the public whom they represent in their heavily gerrymandered districts.

    I’ve not seen the companion legislation requiring police officers, firemen, amublances crews, and the Indiana National Guard to similarly provide this sort of funding. But just those government services that migh benefit people who normally don’t vote Republican.

  4. Amazing, the hypocrisy at the state house. Republican Sen. Jack Sandlin of Indianapolis authored a bill (SB385) and co-authored by Aaron Freeman, this session that would add two years to a 2019 bill that had called for a new special tax district to fund rich republican Ersal Ozdemir’s doomed soccer stadium. Ersal couldn’t meet the requirements of the law passed in 2019, so of course his plutocrat friends at the state house grant him leniency.
    But when it comes to public transportation, the righteous at the State House could do nothing but condemn IndyGo for allegedly not meeting their deadline. I say allegedly because they did meet the original bill’s funding requirements. This SB385 go back and changes what qualifies at outside funding.
    Even more ironic is senate democrats relied on the part time attorney general Todd Rokita for a legal opinion. Asking Todd for legal advice – come on Really!

    1. And last year the legislature was quick to expand the downtown sports district – sending more state and local tax dollars to the CIB – to upgrade BLF and benefit the Pacers.

  5. If IndyGo agreed to the terms and did not meet there obligations, then they should not receive the funding. Federal grant money would of been raised by taxing somebody.

    1. Steve, IndyGo didn’t agree to anything. There is no “agreement” and IndyGo has already stated they interpret the original law differently. And, I would love to see Indiana stripped of some of its federal funding that it was planning to use on highways because of its policies of promoting inequitable transportation funding–I have already contact the federal DOT and asked them to investigate. You shouldn’t object, after all “federal grant money would have been raised by taxing somebody.” Of course, it was already raised, so it would just go to another state, and hopefully, one that promotes more equitable transportation policy.

  6. It unfortunate that Indygo uses questionable business and political practices to force its agenda. The redline project is a perfect example of and maybe the very reason they are under scrutiny from elected officials.

  7. Yes, IndyGo hasn’t met their requirements on raising private donations. But the requirement was a unrealistic provision from the start. And it is not at all a common means for funding public transportation and infrastructure. The state needs to amend (eliminate) this provision and then leave IndyGo oversight to the local officials and voters — they voted for the tax increase and don’t need to be managed by the state.

    1. Scott, NO they were not. They have a special transit income tax, a portion of the property tax, and certain state and federal grants. There was no request for additional funds. At least know what you are posting about before rambling off nonsense.

  8. State Republicans are willing to jeopardize $177 Million in Federal funding because of an asinine fundraising requirement that Marion County residents didn’t want in the first place. How’s that party of “Small government” and “local control” going for you Hoosiers? Unbelievable the crap we have to deal with in Indianapolis.

    1. They would rather get rid of federal dollars than invest in something that might make liberals move to Indianapolis. Yes, they’d also like rich people’s income taxes to stay in CA and NY, vs them possibly losing any power due to the City’s population growth. They will do anything they can to stop Indianapolis from growing further.

  9. Moreover, more than half the cost of the BRT projects are going straight to infrastructure improvements that help drivers and pedestrians. The amount of money that the Indianapolis taxpayer is putting towards these BRT projects is less than what the cost of the infrastructure improvements alone are, let alone the cost of the entire project. The federal government is gifting Indianapolis hundreds of millions of dollars and these Indiana Rs are risking it over a vague and obscure part of the 2014 referendum bill that no Indianapolis residents who voted for even knew about and that imposes a rule upon IndyGo that no other transit agency in the country has to deal with. Building out 69 to Evansville is much more scandalous and costs the state much than IndyGo’s BRT projects. The entire section of 69 that has been built out South has about the same amount of traffic as the Red Line did passengers, pre-covid and before the Red Line fixed most of its issues.

    1. The same argument I have stated. The taxpayer/voter didn’t know what they were in for when they voted for this IndyGo joke of a transit plan. The infrastructure improvements will need to be maintained by the city and traffic restrictions to neighborhoods and businesses were not expected when voted on. Don’t sign an agreement if you have no prospect of being able to live up to it. I’m sure IndyGo thought they would just kick this down the road and hope for the best. Red wasn’t working before the pandemic and not much hope in the future. There was no need for this “fixed route” scheme in the first place.

  10. So where’s the requirement for INDOT to raise 10% in donations for every highway project? Only seems fair, as those are orders of magnitude more expensive.

    1. This is what IndyGo signed on for. It shows just how inept they were and still are. Went to dozens of pre Red meetings and hearings, tried to get any concessions or changes to some of their plans on parking and left turn restrictions. NO, it had to be down the center of College and Meridian, but no where else. Just think of all the busses they could have purchased with those funds to create a more widespread system, run more often throughout the city and be able to make route adjustments. They haven’t been run properly for decades, no clue.

  11. Maybe more (Chinese) electric busses that turned out so well?! Maybe the city could convert the Blue Indy charging stations… oh wait, those were failures, too. All planned by government bureaucrats who are clueless – but well intentioned, right?

    1. Lawrence, Good question. Where was the State Legislative oversight when Republican Mayor Ballard signed the Blue Indy deal? or the 50 year parking meter deal? or the Broad Ripple parking garage deal? Hmmm. It seems the gerry-mandered, super-majority Republican-led legislature has a bias here.

  12. SB141 noted below specifies “project.” The “Project” in question is the Red Line for which the annual operating cost is approximately $8 million. Therefore, the 10% requirement should be $800,000 annually.

    SB 141 text: Central Indiana public transportation projects. Requires the budget agency to withhold local income tax revenue from an eligible county if the eligible county fails to raise certain revenues for a public transportation project. (Current law requires eligible counties to raise: (1) 10% of the annual operating expenses of the project from sources other than taxes and fares; and (2) 25% of the annual operating expenses of the project from fares and charges.) Specifies that the amount of local income taxes withheld from an eligible county may not diminish the amount of money distributed to the eligible county for deposit in the eligible county’s public transportation fund below the amount required to pay its debt service obligations for bonds issued for purposes of a public transportation project. Prohibits Marion County from creating additional IndyGo bus rapid transit lines if the revenue requirements are not met.

    This is bad law. SB 141 does not reflect a measure to improve transit for the people of Indianapolis nor does it promote better service or accountability. This equates good transit to good fundraising — that is NOT true.

    SB 141 reflects a measure to circumvent the will of the people. Indianapolis voters approved a referendum by a margin of 59.4% to tax themselves to pay for transit improvements. The improvements should not be impeded. But setting attainable and achievable performance measures is reasonable.

    The referendum noted the improvements proposed; these had been clearly identified in the Marion County Transit plan. BRT is a key element of that plan.

    The proposed SB 141 is a bad proposal. It is punitive. If not killed, it should be amended to proactively support the transit improvements people voted for. Please note the following:
    • Requiring IndyGo staff a foundation to solicit funds in an amount of 10% of project costs before further improvements can be made does not make sense. The transit income tax revenue is sufficient to improve operations and service. While obtaining additional income is laudable and a welcome activity, it should not be a criterion to advance the transit program.
    • Requiring attainment of 25% operating ratio for the Red Line BRT as a criterion to advance the transit program is unreasonable given systemwide operating ratio is about 10%. With system improvements, performance metrics will increase. The Red Line had not operated for a full year before the pandemic upended travel for all people and modes. Correspondingly, it is unreasonable to expect projected ridership to have been achieved. A period of 18 to 24 months is typical for ridership to mature on a new route. Improving system operating ratio is reasonable, but this should be incremental as the transit plan is implemented.
    Without implementation of service improvements, it highly unlikely that operating ratio and ridership can improve.

    This appears to be a slap meted out to hurt Indianapolis citizens or perhaps another target. Why? Why not support a quality transit system in the capitol city? Are the citizens who voted to pay for this not worthy of having it. Good service is the job of transit — why set a totally unrelated criterion. And, even if this ‘fundraising’ criterion must prevail, why stop progress in implementing (a) service improvements and (b) further BRT.

    The city has top venues for sports, a great airport (with relatively few flights), a very pleasant downtown. It is an urban city. Why not catch up with peer cities with transit. One reiterates: the voter approved referendum and the revenue from the tax is enough to do what people voted for.

    SB 141 is punitive. No rationale or justification supported by data has been presented for the aspects of this bill.

    So, upon raising the 10%, the State would give IndyGo the 10% hold back. In that case, the revenue would be 10% additional — to which line item of the budget would this 10% apply?
    • A better policy would be requiring the X% “donation” to be held in a reserve fund that would be used to mitigate construction impacts, assist adjacent businesses during construction, improve traffic signalization, or other roadway and traffic-related infrastructure items along IndyGo routes throughout the county. But, improvement project should advance, as planned, so federal funding would not be lost. Design details of projects and implementation strategies could be changed.

    This looks bad nationally and sheds a bad light on Indiana. It further puts all project is Indiana under the Lupe for federal review in light of grant requests.

    Indianapolis include very urban and semi-rural areas. If residents in semi-rural areas do not wish to pay the transit tax, why not just redefine a transit service district to exclude these from tax and service. The transit service district need not be exactly coextensive with city/county limits.

    Why set a totally unrelated nonThe West Lake extension of the South Shore, a worth project that is 8 times more expensive than the Red Line in Indianapolis for the same projected ridership, is not subject to such a provision. Why?

    The bill which should be debated on the Senate floor is how to ensure accountability while maintaining federal funding for extensions and improving access for citizens. Here’s what should be done:

    – set performance measures that are reasonable and attainable

    Which of the legislators understands transit operations, federal funding (and how difficult it is to get it), and that this particularly hurts those who need transit.

    It is clear that this legislation is part of a distaste some have for transit, but it more clearly shows the dissatisfaction by some legislators that the private companies and corporations that were in favor of the transit referendum did not want (1) any tax thrust upon them and (2) have not contributed to IndyGo.

    This is such disappointing legislation from a body which should seek to help all citizens and foster a positive image of the State.

    This is an unfortunate denouement for a city which has historically been the laughingstock of transit in the United States until implementation of the Red Line which moved Indianapolis and IndyGo to a respected metro that would prove the much touted statement that “buses and do as well as rail in providing rapid transit” were indeed true.

    This action disbenefits citizen who voted to self-tax to pay for improvements. This circumvents the public will. Yes, the Senate can do this. But, because you can, is it right? Is it right? Is it reasonable? One opines and and clearly show reason why it is not.

    IndyGo displayed an 8% annual growth in ridership in 2019. This occurred when ridership was down throughout the nation except for a few agencies, such as Seattle which is a major city growing rapidly and with a comprehensive transit network. This was a direct result of service improvement.

    Don’t make service improvements stop.

    Dont’ ignore gains made.

    Don’t hurt people to prove a point.

    Do work to establish performance measures that make transit service efficient for users.

  13. A 2019 ridership increase was before the Redline, so why not just improve what was there. Because IndyGo is not capable of providing any common sense approach to public transportation. Only those that voted were in favor of the tax increase, and of those, I feel that many were not aware of the ramifications of the Red project, and when they were made aware, they protested in droves, to no avail.
    IndyGo had to change providers for it’s open door riders. The new company is not any better, and does anyone really believe IndyGo can be trusted with millions more tax dollars. The Chinese buses are a complete failure. Other metro areas cancelled their contracts with BYD due to continued problems and IndyGo will now purchase diesel hybreds.

    Again, this is what IndyGo signed on with.

    All that was required was more buses, more frequent runs and the ability to make adjustments to routes, which IndyGo promised one the Red started. What happened to that plan?

    1. IndyGo did not “sign” anything and they already stated they interpret the original law differently. Hopefully, Holcomb vetoes this idiotic new bill from the Country’s Worst State Legislature.

    2. That’s fine.

      Then let’s also not change the rules to get the Indy Eleven more time to do their stadium deal, and let’s also not give charter schools a giant chunk of the meager portion of school funding increases that we are putting in our budget. After all, they knew the rules when they opened their doors. No funding increases, ever.

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