Indy Transit Tax Headed to Council

DALLAS -- A plan to raise taxes to fund expansion of bus services throughout Indianapolis is headed to the Marion County City-County Council for a vote Monday.

The county's Rules and Public Policy Committee on Tuesday approved the .25% tax hike by a 5-2 margin, with the "no" votes coming from Councilman Monroe Gray, a Democrat, and Councilman Jeff Coats, a Republican.

Marion County voters approved the tax referendum last November by a 60% to 40% margin but it won't go into effect until it receives full council approval. The proposal won in 19 of 25 City-County Council districts.

Indianapolis Mayor Joe Hogsett's chief of staff, Thomas Cook, told committee members that the mayor plans to sign the transit tax if it's approved by the full council.

Gray who voted against the plan on Tuesday is concerned there is a lack of demand for bus service in Indianapolis. "Part of this contract depends on how much the fare box produces," Gray said of the county's transit plan, asserting it could suffer from low ridership.

Indianapolis Public Transportation Corporation, also known as IndyGo, operates the county's public transportation system. IndyGo has put a price tag of $390 million on upgrades and expansion projects funded through a mix of local and federal funds and borrowing.

IndyGo presented its plan to use the funds in January. The referendum would raise $56 million a year for IndyGo. The county would use some to fund projects on a pay-as-you-go basis and leverage a portion to support borrowing, according to the council's chief financial officer Bart Brown.

The level of borrowing, if the measure passes, is not yet set.

The funds would be controlled by the Marion County City Council and would be accessed by IndyGo through the annual budgeting process.

The money will allow buses to run more often and for longer hours and reduce wait times for passengers. The money will also fund three rapid transit bus lines.

Construction of the Red Line, a rapid-transit bus line that could eventually run from Westfield to Greenwood, was projected to be financed by a $75 million federal Department of Transportation grant. The grant still needs approval from Congress.

"There has been significant discussion on what might happen on the federal level but an important point that we want to note is that the local funding is absolutely critical for any improvements for us to move forward," said IndyGo public affairs director Bryan Luellen at the Tuesday meeting.

Luellen said that federal inaction on the funds has delayed construction of the red line which was slated to begin in 2017.

He said that if no federal money is granted, IndyGo is still prepared to move forward with the network upgrades that it would be able to fund entirely with the 2.5% tax increase but with a delay of three years. IndyGo's original plan called for full build out by 2021; if the federal money goes away it is projecting the network can be build out by 2024.

"The implications of removing the small starts grant is that we can still build the network it would just take a little longer to build," said Luellen.

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