IndyGo budget detoured on road to Red Line, tax hike vote

INDIANAPOLIS, Ind.-- IndyGo’s journey to bring rapid transit and expanded bus service to Marion County is running into a roadblock just as the transit agency is anticipating an unprecedented public ballot on funding.

The Municipal Corporations Committee of the City County Council voted 5-3 to not endorse IndyGo’s $71 million budget for the upcoming year.

The budget proposal is not dead and will likely be guided back on track during the next full council meeting on October 10.

For the second week in a row, on a bi-partisan basis, councilors expressed their dismay at the anticipated Red Line rapid transit line to be built from Broad Ripple to downtown to the University of Indianapolis and a first-of-its-kind referendum on the November ballot to provide IndyGo with up to $56 million a year to expand bus service throughout Indianapolis.

“I am troubled by the Red Line. There are constituents in my district who will not benefit from it now, nor will benefit from it later but are being asked to vote for it in November,” said Rev. Stephen Clay, an eastside democrat.

IndyGo officials said Red Line funding is dependent on a federal grant yet to be approved but certainly anticipated from Congress and that the proposed income tax hike, which would cost Marion County taxpayers an additional $100 per $40,000 of income annually, would fund bus routes that would feed into the Red Line.

“My concern is we have no documented outline for the referendum that’s on the ballot in November,” said Warren Township Councilwoman Lakeisha Jackson, a democrat, who is worried that the income tax windfall would almost double IndyGo’s annual spending potential. “My concern is we do not have a proposed budget….We don’t know what that money’s going to be used for or even an ideal of what you’re thinking about it for.”

Republican Aaron Freeman from Franklin Township warned that IndyGo had, “put the cart in front of the horse,” as he was already displeased with the answers Mike Terry, IndyGo President & CEO, had given the same committee the week before.

“In my opinion, this municipal corporation has put this council in a  very very very bad place because if that referendum (fails), they can’t cover their expenses in this budget so they bet the farm that this referendum is going to pass, and if it doesn’t pass…it's not good practice for a director to hedge the way they hedged and said, ‘I don’t have the money to cover it if it doesn’t pass.’

“I’m not going to vote on a budget, in my opinion, that is going to bankrupt this council and this city because their poor planning becomes a problem on my part.”

The morning after the rare budget rejection Terry and two allies appeared before a meeting of state transit officials in Carmel to tout Marion County’s aggressive expansion plans and unprecedented reliance on income tax revenue.

“I’m not sure how much related to our 2017 budget,” said Terry when asked to explain the committee’s vote. “Some of it related to the Marion County transit plan, some of it the referendum, so it’s a little surprising.”

Terry said his agency may need to step up its public explanations of the challenges IndyGo faces and the parallels of the Red Line project the income tax referendum, two virtually simultaneous but not necessarily intersecting issues.

“There’s a lot of pressure on this and to have a separate transit referendum out there with existing capacity…sure, I think there’s some tension where others see needs in other areas and, ‘How can we do transit?’”

If approved, Marion County would be the first municipality in Indiana to support its local transit system with a dedicated tax fund stream the way libraries, schools and some police departments are financed now.

“A successful outcome in Marion County would have a positive impact not only in Indianapolis, but the increased focus on transit would have ripple effects through the entire state,” wrote David Cangay of the South Bend Transportation Corporation and president of the Indiana Transportation Association, host of the statewide conference.

Terry was joined in his presentation by Mark Fisher of the Indy Chamber, a strong supporter of the transit plan and the November referendum.

Fisher, the Chamber’s chief lobbyist, said it had taken several years and four attempts to convince the General Assembly to authorize income tax votes as the funding mechanism available to transit systems seeking dedicated funding streams.

Corporations, Indy Chamber, Indianapolis realtors and other businesses, along with labor unions and interest groups representing older Hoosiers and the disabled, have unified in their support of the tax increase to create, “a better connected region,” said Fisher.

“The Marion County transit plan is just the beginning and to branch out regionally, but Marion County is the beginning.”

Fisher said real estate owners and developers, their businesses unburdened by the new tax, would then be free to redeveloped blighted properties along the routes and bring economic prosperity and the promise of new jobs to vast swaths of the eastside where many upgraded lines would be located.

“Developers are looking to where there is going to be enhanced demand for transit services,” he said. “Not just big developers but small developers.”

Fisher did not have a timetable for the launch of the supporters’ advertising blitz to convince voters to raise their own income taxes nor an estimated budget.

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