INDIANAPOLIS — In his annual State of the City address, Indianapolis Mayor Joe Hogsett unveiled a new funding proposal that could help fix Indianapolis roads.
The proposal is still in its infancy — a lot of discussion and eventual approval by state lawmakers is still necessary to make it happen. But Hogsett announced a framework Wednesday evening that could help the thousands of people driving in and out of Indianapolis get to their destinations without the frustrations of major road issues.
Anybody who has driven on Indianapolis roads over the past few years knows the issues — the roads are in bad shape, either through potholes or general disrepair.
But Indianapolis officials have had problems getting the funding to fix the city’s roads, because more people use the roads than live in the city. Nearly a quarter of Marion County workers commute from one of the surrounding eight counties, according to data provided by the city.
This means that more than 161,000 people who work in Marion County pay taxes to the county they live in, and that money doesn’t go toward the roads in Marion County.
Over the past few years, some city or state officials have floated the idea of a commuter tax — a new tax levied on people who work in Marion County, but don’t live there. The concept of a commuter tax has been almost an obscenity in central Indiana. State lawmakers don’t want to levy new taxes on their constituents, and officials in the counties surrounding Marion don’t have much interest in helping Indianapolis with no benefit to them.
Indianapolis is calling for Marion County and the eight surrounding counties to contribute a portion of the growth of their income taxes to a regional infrastructure fund. The money in that fund would then be distributed back out to the nine counties based on usage of locally funded (not interstates) roads.
The idea uses money from the growth of the region’s income taxes, meaning no new taxes would be levied on anybody. City officials say it could produce as much as $100 million in annual road funding.
Five of the nine central Indiana counties would see a net increase in their funding.
Fishers Mayor Scott Fadness questioned Hogsett's proposal in a statement.
“I’m perplexed by Mayor Hogsett’s proposal that is not consistent with the work the Central Indiana Conference of Elected Officials has been doing collectively over the last year," Fadness said. "While I agree that regionalism is important, I believe we need to find a solution that will transcend political seasons and ensure the long-term sustainability of our region.”
How It Works
Currently, all nine counties levy some spendable income tax — meaning money received from people who live there that the county can spend however it wants. It isn’t tied to a specific cause, like economic development or public safety.
The revenue from income tax is expected to increase over the next few years, because of inflation, new jobs, population growth and other reasons. Under Hogsett’s proposal, a percentage of that growth of each county’s spendable income tax would be allocated to the regional infrastructure fund. Each of the counties would contribute 50% of its new revenue in the first two years, then 20% after each year that. The rest of the money from the growth would stay in the county where it originated, and wouldn’t be used for the fund.
The money in the fund would then go back to the nine counties but allocated differently than how it was collected. The funding would go back to the nine counties based on the vehicle miles traveled in each. Vehicle miles traveled is an INDOT measurement that indicates how much it costs to maintain the roads in each county. Under this plan, the counties that have more vehicle miles traveled would receive more funding for road management.
In this very early version of the proposal, Marion County would receive 46% of the money from the regional infrastructure fund and contribute 32% of the money. The new money will bring Marion County to the $160 million annual infrastructure funding goal. On the flip side, Hamilton County would receive 18% of the money but contribute about 33% of the money.
Hancock, Madison, Marion, Morgan and Shelby counties would receive more money than they contribute. But Boone, Hamilton, Hendricks and Johnson counties would pay more than they get back.
The Next Steps
Now that Hogsett has announced the plan, how will it get implemented?
The Central Indiana Council of Elected Officials will discuss the plan and their ideas. The CICEO is made up of some of the top elected officials of the nine central Indiana counties. The General Assembly may hear and discuss the ideas in the 2020 legislative session but will be unlikely to pass any significant legislation until 2021, the next budget session.
A potential problem with this kind of proposal passing include any pushback from the surrounding counties, especially those that would pay into the fund more than they receive out of it. But Hogsett and Indianapolis officials hope people in those counties see a larger investment into infrastructure in Marion County helps the entire region, not just Indianapolis.