Indy mayor looks to surrounding counties to help pay for infrastructure needs

Indianapolis - Mayor Joe Hogsett has a new plan to fix the city's crumbling roads and infrastructure, but it requires help from those living outside city limits.

Every day, more than 160,000 people who live in one of the eight counties surrounding Marion County drive to their jobs in Indianapolis. They use roads like Washington, Binford and Keystone, Madison and 10th to get to work, along with many others in need of patching and repaving.

"I think even outsiders look at the roads as one giant pothole. It's embarrassing," said Linda Klain, Indianapolis.

Indy's infrastructure needs from fixing roads and bridges to replacing sidewalks and improving intersections have long been underfunded. This year, the city will spend $126 million on roads while the need is $160 million, according to Public Works director Dan Parker.

So, how does the city fill that gap? With help from commuters, according to the mayor's plan.

"Those commuters have jobs in Marion County, but they aren't paying for any of the infrastructure," Parker said. "They pay zero in income tax to Indianapolis. It all goes to the county of residence."

The plan, introduced at Hogsett's state of the city address Wednesday night, calls for a "regional infrastructure fund," funded by income tax revenue from the nine-county region, which includes Marion Boone, Hamilton, Madison, Hancock, Shelby, Johnson, Morgan and Hendricks counties.

"The roads need fixing, they're in terrible shape," said Indianapolis resident Lucille Samuels, who added "they don't need to raise taxes or anything like that."

Parker said the plan would not raise taxes, but capture a portion of future growth.

"As the economy grows across the region, there will be more in income tax and a slice of that will be dedicated to the (regional infrastructure) fund," Parker said. "What folks are collecting now is not touched, it's only in the future where there's growth" in income tax revenue.

That money would then be divvied up based on road usage. Five counties - Shelby, Madison, Hancock, Morgan and Marion, would get more money back than they put in, with Marion County getting the biggest share, about 46%.

Nathan Swingly, who lives in Hamilton County and works in Indianapolis said he supports the plan.

"I don't pay a commuter tax," he said, noting he did while living Pittsburgh. "Last season, I popped five tires, so I understand the need to invest in infrastructure."

"It's not a bad idea. People in the surrounding counties who work in Marion County use the roads more than many who live here," said Dana Jackson, who lives in Marion County. She said she also understands why those who live in the donut counties but don't work in Indianapolis "may not want to pay into it," or have their tax dollars going to a different county.

The fund needs approval from state lawmakers. Parker said the goal is to have a proposal in time for the start of the 2021 session.

Eyewitness News reached out to several area mayors for their to Hogsett's plan.

Fishers Mayor Scott Fadness said, "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. 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."

This statement came from Carmel Mayor Jim Brainard: "I need to study this proposal. I agree that we need to work cooperatively, but this is a very complicated proposal that needs to be studied to ensure that it is not a band-aid but is in the best interests of residents of both Indianapolis and Carmel."

And this response from Greenwood Mayor Mark Myers, "I was surprised to hear Mayor Hogsett's proposal for the first time last night. It doesn't reflect the conversations many mayor's and town leaders have been having about ways to collaborate and invest in transformative projects. I'm committed to working on solutions that will benefit Greenwood and the region."

The mayor's office provided this document "Regional Infrastructure: A Conceptual Framework"

A successful and thriving regional economy demands a reliable road system. Improving transportation infrastructure provides workers with better access to their places of work, allows manufacturers to more efficiently supply their operations, and generally facilitates the movement of goods and services throughout the region. On the other hand, underfunded transportation infrastructure results in higher supply costs, increased commuting time, higher vehicle operating expenses, and ultimately, a less productive region. Indianapolis serves as the regional employment center for the Central Indiana economy. Approximately one of every four workers in neighboring counties commute to work into Marion County each day – more than 160,000 people utilizing local infrastructure. Out of all vehicle miles travelled in the nine-county region1, nearly half of the road usage takes place in Marion County. Consequently, Marion County taxpayers bear a disproportionate burden for building, maintaining and replacing these roads and bridges used by hundreds of thousands of commuters throughout the region.

Indiana’s local taxing mechanisms do not adequately allocate revenues in ways that are proportional to the use of public roads. In Indiana, local income tax revenues are exclusively distributed to the county of residence, not the county of employment. The resulting tax revenue is not sufficient to sustain and improve the roads that bring those who live in surrounding counties to work each day in Marion County.

The proposed Regional Infrastructure framework creates a way to fund regional infrastructure improvements, without requiring a tax increase. The framework is comprised of two elements:

1. All counties within Central Indiana’s nine-county region would contribute a portion of future income tax growth on the first 1% of their local income tax rate to a regional infrastructure fund.
2. The proceeds of the funds would be distributed based on usage (vehicle miles travelled) of locally funded, regionally significant transportation infrastructure, so that the most-used roadways would receive the appropriate monetary allocation.

By only tapping the growth of the first 1% of the increase in income tax revenue, this framework avoids impacting or reallocating the current revenue levels of Central Indiana taxing units, and would not require a tax increase. Should additional revenues be required for budgetary use, the existing options for increasing income tax rates are fully available.
As transportation assets are long-lived, it is typical to sell bonds to finance assets over the duration of the operational timespan. With the proposed framework, this strategy could produce between $50M and $100M in annual road funding, which could then be leveraged to maintain and improve Marion County’s regional transportation infrastructure.
Importantly, this distribution formula would produce a more equitable distribution of revenues across the region. Under current projections, five of the nine counties in the region would see an increase in funding.

(1 For these purposes, the nine-county region is defined as the following counties: Marion, Hendricks, Boone, Hamilton, Madison, Hancock, Shelby, Johnson, Morgan.)