Transit tax opponents fear expanded bus line will bankrupt taxpayers

INDIANAPOLIS, Ind.-- If Marion County voters turn down a proposed income tax hike in November to finance expanded bus service in Indianapolis, taxpayers might still be on the hook to pay for the Red Line mass transit service.

Should Congress approve, as is expected, a $75 million grant to Indygo to build the Red Line service and its infrastructure from Broad Ripple to downtown Indianapolis to the University of Indianapolis, but voters turn down a $56 million income tax hike to pay for the actual operation of the new system, a request to raise Indygo’s share of property tax levies may face city county councilors in 2017.

Bart Brown, Chief Financial Officer of the council, told Fox 59 News that it is his understanding that the federal grant can only be used for infrastructure construction and not the procurement of non-Red Line buses or hiring of drivers to operate them.

A critic of the Red Line proposal disagrees.

Brown said Indygo officials have indicated they would ask the council to boost property tax levies to raise revenues to operate the Red Line, essentially locking voters and property owners into higher taxes to pay for the system even if the November referendum is defeated.

Under the referendum, only the income taxes of private individuals would be raised, not the taxes of businesses that have endorsed the Red Line project and would presumably benefit from access to their workforce or spin off route development opportunities.

Should the referendum fail, and property taxes be raised, businesses would pay their share, too, of the Red Line costs.

The tax referendum facing Marion County voters in November, and the tens of millions of dollars it would raise to finance expanded and updated bus service and technology throughout portions of Indianapolis, has an impressive list of supporters.

The Indy Chamber, the Hoosier Environmental Council, metro area realtors, the Indianapolis Urban League, Central Indiana Community Foundation and Indianapolis restaurant owners all think the Red Line and its corresponding bus line improvements would be a good thing.

Arrayed against them are Lee Longley and some friends who call themselves “Stop the Red Line.”

“This is a classic David and Goliath struggle,” she said. “We are up against special interests.”

Longley said she has studied Indygo’s federal grant request, and buried in the fine print, is a provision that would allow the bus system to spend the $75 million it would receive from Washington on rolling stock, existing routes and drivers and not handcuff the system, and the taxpayers, into the Red Line infrastructure.

Red Line supporters tout its advantages to current and potential future bus riders.

“There are thousands of individuals who benefit from this system and there are thousands of individuals who don’t even know that the Marion County transit referendum is going to be on the ballot in November,” said Kelli Mirgeaux of “Transit Drives Indy”, the coalition supporting the tax increase and Indygo expansion.

On this point, and just about only this point, “Transit Drives Indy” and “Stop the Red Line” agree.

“People know virtually nothing about what’s being planned,” said Langley.

What’s being planned is a 14-mile series of dedicated bus lanes bisecting Indianapolis from Broad Ripple on the north through downtown to University of Indianapolis in the south with routes stretching along East Washington Street and East 38th Street to Meridian Street with very little penetration to the west of the city.

“Where you see three lanes of traffic on College, you will see two lanes, one going south, one going north. There will be a permanent bus lane with stations in the middle of the street,” said Langley as she stood at the intersection of College Avenue and 54th Street in an area referred to as SoBro.

Langley fears that as the dedicated bus lanes would be supported by 15-inch high platforms of the bus stations that vehicles would not be able to cross the berm.

“The bus rapid transit system is essentially light rail on tires, so they’re longer buses, so they’re easier for people to get on and off,” said Mirgeaux. “They’ll have kiosks for payment so you can pay outside of the kiosk and its better entry points. They’ll have raised platforms so individuals who need that accessibility point for their boarding one and off.”

At a community meeting this week an Indygo facilitator told attendees to think of the system as, “trains on rubber tires.”

“These are sixty foot accordion buses,” said Langley.

“It is a bus,” agreed Mirgeaux who said the vehicles will use, “the latest energy efficient technologies,” such as electrical battery power.

Mirgeaux said the income tax hike would benefit the entire Indygo system, not merely the Red Line operations.

“That revenue will support a 70 percent increase in frequency,” said Mirgeaux. “By 2018 and 2019 you’re going to see more drivers hired, you’re going to see more regular buses in the fleet system who are just able to increase the frequency as opposed to what are our services our today.”

That is, if the local tax referendum is approved in a countywide vote in November, even though not all Marion County residents will benefit from the bus lines which would run miles from their neighborhoods and workplaces.

“The southeast part of the county, there’s no bus service,” said Langley. “The southwest part of the county, there’s no bus service. The west part of the county is seeing some reduction in service and the northwest part of the county is seeing some reduction in service.”

Some voters, those being property owners who already pay two levies for bus service, will be asked to tax themselves a third time to support Indygo with a .0025 income tax increase, essentially an additional $100 tax per year on every $40,000 of income.

“That referendum provides the dedicated revenue stream to support Indygo operating expenses so it will generate roughly $59 million a year in operating expenses which really drives that seventy percent increase in frequency,” said Mirgeaux.

Taxpayers who live in a donut county but work in Marion County would not be subject to the tax according to Lacey Everett, Government and Community Relations Specialist of MIBOR REALTOR Association.

“It is defined that only Marion County residents pay income tax in Marion county,” Everett clarified in an email to Fox 59 News. “The tax will only be raised and spent in Marion county. This tax will only be raised and spent in Marion county. If surrounding counties choose to pass their own referendum to connect to the Marion Co system, that would be the only time they’d see a tax increase.”

At this point, Hamilton and Johnson counties have no intention to join the plan.

“So, once again, Marion County residents are bearing the brunt of maintaining our streets, maintaining our infrastructure, paying for our sewers and now paying for a billion dollar bus system that is going to overload the taxes on our citizens,” complained Langley.

Mirgeaux indicated that even if the referendum vote to provide funding for operations failed, the Red Line would still be built.

“Our group is fearful it is going to fall back on taxpayers and it will be a bottomless pit that we will have to subsidize,” said Langley.

Mirgeaux said Indygo will achieve more frequent and faster service by drastically cutting back the number of stops on the Red Line route.

Langley has studied the Indygo plan and said stops along College Avenue north of 38th Street will be reduced from 28 to seven.

“This is a huge and necessary first step to improve mass transit opportunities for the residents in Marion County, but it's only a first step,” said Mirgeaux. “It’s a change and it’s a pattern change and so if people choose to adapt to the change, I think they will find it more useful and helpful to them.”

Mirgeaux said development can be expected to grow along the route and traffic congestion will be reduced due to increased ridership.

Langley called federal mass transit initiative priorities of route development “the dirty little secret” of the Red Line project which would explain the support of the business and real estate communities for the plan.

As the leading critic, Langley has studied the federal grant, the Indygo contract, its annual report and proposal and said the anticipated ridership boom across the entire system, not just the Red Line, is wishful thinking not supported by history.

“The bus planners are projecting there will be a fifty percent increase in revenue from fares,” said Langley who said she has reviewed Indygo figures showing a current leveling off of fare revenues of $10 million annually. “It's taken most bus plans like this five years or more to achieve a fifty percent revenue increase in fares, if they’ve been able to achieve it at all, and most of them have not.”

Langley said the new buses will have excess capacity that is a long way from being fulfilled.

“They will carry 120 passengers on a line that is estimated to average 15 passengers,” she said. “I think it’s a circa 1940s solution to a contemporary problem. In an era of uber and lyft and so much happening on our smart phone, we can summon rides, we can real time information, and why are we building something that is really retro?”

Mirgeaux admits the coalition has an uphill struggle to convince voters in the outer reaches of Marion County to support an enhanced plan that seems to serve the city’s core yet virtually ignores Castleton, 86th and Michigan Road, Indianapolis International Airport and vast swaths of the southside.

“It may not impact them directly but it could impact where they go to get their health care, the nurse that they see on a daily basis, wherever their child goes to school, their teachers, so it’s a broad impact to think about,” the coalition spokeswoman said. “More buses will be in service and running and more drivers will be hired so you’re not just talking about new construction on transit lines, you’re talking about improvement of our existing fleet today.”

The Public Works Committee of the City County Council was briefed by Indygo planners on the Red Line project Wednesday evening.

Lunchtime informational meetings hosted by Indygo will be held Friday at the Irvington, Spades Park, East 38th Street and Brightwood public library branches.