by Joseph Born
The General Assembly should act to prevent further flouting of the transit-tax statute’s requirement that riders and employers pay their fair share.
In the last year before Indianapolis’s transit tax kicked in, less than one resident in twenty rode the bus even once. Those few riders paid less than 14% of the IndyGo fixed-route system’s operating expenses. And IndyGo’s only other beneficiaries were businesses whose employees didn’t bear their commutes’ true cost.
Directly or indirectly, therefore, residents who received no benefit bore most of the cost. And allowing counties to impose a transit income tax could have made this injustice worse. To avoid such a result, the General Assembly attached a condition when it granted that power: the power can be exercised only if employers and riders respectively bear at least 10% and 25% of the resultant system’s cost.
But IndyGo responded by reducing riders’ contribution instead of increasing it. And when the time came for the Indy Chamber’s members to put their money where their mouths had been when they’d lobbied for the tax, they withheld any meaningful support of the foundation that was established for that purpose. So the mayor and Council would have refused to impose the transit tax if they’d been following the law.
But they imposed it instead. This was true to form. They had similarly violated the spirit if not the letter of the statute’s referendum requirement by ramming the vote through before residents had been given the most-basic fact: how much added transportation the transit tax would provide. IndyGo rebuffed all pre-referendum requests that it divulge how small the expansion’s system-wide ridership increase would be, but the referendum was held anyway.
Only after the referendum passed did a projection slip out: the Hogsett Administration’s “Thrive Indianapolis” plan said the increase over 2016’s 9.2 million rides could be as little as 15% even after the Red, Purple, and Blue Lines are all operating. That works out to $40 per added ride if the transit tax collects $55 million annually.
And by my calculations the expansion’s addition of more, emptier buses will probably increase, not decrease, the city’s CO2 emissions and traffic congestion and thereby degrade its aggregate mobility. In short, voters were duped. I would therefore repeal the transit-tax statute.
Short of repeal, though, the General Assembly should at least respond to the Council’s lawlessness by providing enforcement mechanisms. Since the Council has shown it can’t be trusted, moreover, I would make the tax rate less vulnerable to creative accounting.
Specifically, the most recent year for which data are available would be taken as a base year, and the sum to which the base year’s bus fares and foundation contributions add would be taken as a limit. The statute would prohibit the Department of Revenue from collecting transit tax if the rate the Council adopts would have collected more than that limit in the base year. And private citizens would be empowered to bring actions against IndyGo to claw back any taxes collected in violation of that prohibition.
Unless the General Assembly takes some such action, the rule of law will erode further.