INDIANAPOLIS, Ind. — IndyGo’s refusal to follow state law and establish a not-for-profit foundation in time for the launch of the Red Line has resulted in an amendment to legislation at the Indiana Statehouse that could stall expansion of the city’s transit system.
An amendment to House Bill 1279, a northwest Indiana regional transit bill, requires IndyGo to live up to its obligations as part of the enabling legislation passed in 2014 that permitted supporters of transit expansion in Marion County to hold a referendum that led to a new income tax on Indianapolis residents.
That tax raised an estimated $54 million the first year it went into effect starting on October 1, 2017.
As part of the enabling legislation, which a statehouse source says brought many lawmakers on board, backers of the bill agreed that any local transit agency would be committed to raising a ten percent match of its first year of new tax revenue through a non-profit foundation drawing on donations, advertising revenues and other non-taxpayer supplied funds.
In IndyGo’s case, those funds were due the day the Red Line began transporting riders late last summer with the annual match decreasing each year afterwards.
As of earlier this month, when IndyGo President & CEO Inez Evans testified before the City-County Council’s Municipal Corporations Committee, the local transit agency’s foundation had not raised any money and been barely established despite three years of promises to councilors dating back to January of 2017.
“This was part of the whole package that they would create a non-profit that would help subsidize the fare box,” said Democratic Councilman Monroe Gray. “It was all part of the package and it seems like it has been lacking that it hasn’t received the attention that it needed.”
Last year, during a previous council committee hearing, IndyGo officials told Council President Vop Osili that there was no penalty for the transit agency failing to reach the goal established by state lawmakers.
“They are seeking partnerships from entities to help fund that and then we will look at all of our existing contracts from advertising revenues things, of that nature,” Evans told Gray’s committee February 12th. “That calculation was not to begin until the Red Line started.”
IndyGo Chief Financial Officer Bart Brown told the committee that no money has been raised even though the Red Line began running last September 1st and that staff had only begun talks with the Central Indiana Community Foundation that week to initiate the process of raising and managing donations from partners.
The transit agency’s failure to comply with the state statute finally reached the ears of a republican lawmaker from Franklin Township.
“I’m proud to stand up for taxpayers. It’s long overdue,” said Senator Aaron Freeman, a former city county councilman and author of the amendment which passed with an overwhelming majority in the GOP controlled Senate. “The agreement here was for them to have skin in the game and for five years they have failed. They should have followed the law all along and they didn’t.
“When something is given to the city, we really want them to follow the law and there has to be repercussions here.”
Freeman explained that the amendment requires the Indianapolis Public Transportation Foundation to make good on its ten percent match commitment or the state would withhold approximately $6 million per year in funding for future Red Line expansion.
“It’s not blocking the Purple and Blue lines until they pay,” said Freeman.
IndyGo is currently in the process of seeking public and federal approval for its plans to expand Purple Line service from Lawrence to downtown Indianapolis and improve Blue Line service along Washington Street.
Osili and Mayor Joe Hogsett, democrats, struck back at Freeman’s attempt to force IndyGo to live up to the state statute that made the first-ever dedicated income possible.
“In 2016, a significant majority of Marion County voters cast their ballots in order to ensure a more robust mass transit system for Indianapolis,” read a statement issued by the mayor’s office. “In the years since, a bipartisan coalition of stakeholders have worked with IndyGo and demonstrated the need to continue investing in connectivity for our residents.
“Today’s amendment puts that connectivity at risk, jeopardizing the further development of our city’s mass transit system. It’s clear that in order for Indianapolis to remain Central Indiana’s economic engine, we must have reliable, accessible transit options that connect workers with opportunities for education and employment.”
Osili also responded.
“In 2016, residents of Indianapolis spoke clearly when a significant majority voted to strengthen their city’s mass transit system. Today’s amendment threatens to silence their voice and deny Indianapolis residents the right to make their own decisions about transit in their city.
“Even more concerning, it threatens to disrupt connectivity to food, health care, education and employment for our city’s most vulnerable residents. Public transit is not only critical to economic development in Indianapolis, it is key to addressing the racial and social disparities in our community that our Council just this week unanimously pledged to end.”
IndyGo released the following statement Friday morning:
“Nearly 60 percent of Marion county voters supported a .25 tax increase dedicated to expanding public transit including bus rapid transit and a more frequent and connected network, that was not dependent on private funds. IndyGo has already made changes to the network to increase service and plans for future capital projects with a goal of a 70 percent increase in service. The amendment, as it’s written today, would jeopardize IndyGo’s ability to implement the plan voters supported, and the additional service IndyGo has already introduced.”
The IndyGo statement did not address the status of the Indianapolis Public Transportation Foundation or its progress in fulfilling the language of the enabling legislation.
Foundation Board chair Rick Wilson gave the following statement:
“The idea that the Foundation would have been able to raise these funds in advance of the opening of the Red Line is not aligned with the reality of the challenges and time constraints of making a brand new non-profit operational. The Indianapolis Public Library Foundation took in around $2 million in contributions and grants in 2017, and it was founded 51 years ago. With its legal standing, staff, and Board now in place, the Foundation can move forward in supporting innovative and accessible mobility projects in the Indianapolis area.”
This afternoon the IndyGo Board of Directors learned that Red Line trips had increased to an average of 4467 per day in January, up 6.5% over December but still far below IndyGo’s predictions that the new 13-mile long service connecting Broad Ripple with downtown and the University of Indianapolis would need to transport 11,000 riders a day to make its budget projections.
The amended bill now moves on to the House.