Council may find tax hike will pay for Red Line funding after all

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INDIANAPOLIS, Ind.– Despite public promises to the contrary, city county councilors tonight may find that the income tax increase approved by Marion County voters last fall can be used to pay for the Red Line transit service from Broad Ripple to downtown to the University of Indianapolis.

IndyGo officials will brief councilors on their request to receive the full appropriation adopted by voters who agreed to tax themselves $100 per year for every $40,000 of income to improve bus service throughout Marion County.

“The .25 percent income tax would generate approximately $54 million a year,” said IndyGo Spokesman Brian Luellen, “and that revenue would help IndyGo to replace our buses, it would help us pay for capital investments like local matches for any federal grants or contributions to projects like to the Red Line and the Blue Line and Purple Line rapid transit.”

During the weeks in the run up to the November election, IndyGo officials insisted the proposed tax increase would fund system wide improvements and new east/west feeder lines into the proposed north/south Red Line, despite ballot language that read the intent of the referendum was for, “improving or establishing public transportation service…and implement three new rapid transit lines.”

“Without federal grant money that plan does not happen,” said Erin Tuttle of “It was a little disingenuous in the wording because the amount of the referendum and IndyGo’s existing budget will not build three rapid transit lines and build the additional services that they promised.”

The Obama Administration budgeted $3.5 billion to pay for 31 projects like IndyGo’s nationwide in the coming year, but Congress carved that authorization back to $2.3 billion and even that money may be in jeopardy due to promises of cost cutting by President Donald Trump.

IndyGo officials are expected to tell councilors that even without congressional funding approval, they could still make progress on Red Line construction with the new Marion County tax revenue on hand.

“Anything less than .25 percent jeopardizes our ability to make improvements,” said Luellen, addressing plans to extend service hours and provide more frequent buses across the county. “If the federal funds for the (Red Line) program don’t become available, then we just stretch out the implementation. The network remains the same.”

Previous IndyGo financial models relied on boosting fare box revenues 50 percent to $18 million a year, up from last year’s projected revenues which continued to fall below $12 million.

“As you deploy more service, ridership grows more rapidly,” said Luellen. “It’s not a linear growth.

“We’re not expecting that half of Indianapolis is going to give up its cars. The assumption is that as the service becomes more useful, more frequent, more reliable, we’ll be able to better serve our existing customers. Some of those folks will ride more than they are today and some folks will get on that haven’t been on yet.”

Critics aren’t buying that budget logic.

“According to the IndyGo board meeting, their ridership is down 4.90 percent year-over-year,” said Tuttle, “so they’re already on a downward trajectory. The idea that they’re going to increase their ridership by fifty percent is a pie in the sky dream.”

After tonight’s presentation, the transit tax increase will be referred to committee for approval before returning to the council February 27th for a final vote.

Councilors can vote to approve only part of the referendum mandate which would go into effect in October.

The council would still exercise oversight of IndyGo’s annual budget.

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