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Indianapolis City-County Council approves $54 million tax to improve transit

File photo.

INDIANAPOLIS, Ind. — City-county councilors approved a transit tax Monday night that Marion County voters approved last Nov. It passed 17-8.

The .25% tax is expected to bring in around $54 million a year to improve bus service. It will cost a Marion County taxpayer $100 for every $40,000 of annual income.

The new tax will be collected starting Oct 1 with revenues flowing to IndyGo in 2018.

A $75 million federal Small Starts grant funding the move won’t be decided until April.

Some city-county councilors were uncomfortable with the uncertainty of federal help while committing Marion County taxpayers to a new tax with no sunset in sight.

“We need to slow this down a little bit and make sure that we do get the $75 million and make sure that the money’s in place,” said Councilman Monroe Gray, a democrat. “This is like building a house without the loan.”

“It’s not an ideal situation that we don’t have more certainty at the federal level, but the reality is that we can deliver the plan that we proposed with or without those federal funds,” said Bryan Luellen.

Without federal aid, IndyGo admits more local tax money will be spent on bond interest payments instead of actual immediate construction and completion of the various lines will be delayed from one to three years.

IndyGo’s bond debt would more than double from $80 million to $176 million and many road, sidewalk and station improvements would be shelved without the federal grant.