GREENFIELD — Hancock County Councilman Jim Shelby says the public would cause a “firestorm” if a proposal to funnel the county’s income tax dollars to help fix Indianapolis roads comes to fruition.
Shelby and council President Bill Bolander, both longtime councilmen, said they disagree with the infrastructure plan, recently announced by Indianapolis Mayor Joe Hogsett, even though Hancock County would potentially receive more money in bond proceeds than it would contribute in income tax dollars.
The plan calls for central Indiana’s nine-county region — Marion, Hamilton, Madison, Boone, Hendricks, Hancock, Morgan, Johnson and Shelby counties — to create a regional infrastructure fund to pay for road improvements across the region, funded by income taxes, the Indianapolis Business Journal reported. It’s estimated to generate between $50 million and $100 million annually.
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The fund would capture a portion of income tax growth that each county generates and put it into a regional fund. The total revenue generated on the first 1% of a county’s income tax would allow the fund to make payments on bonds, and the proceeds of the bonds would be redistributed back to the counties based on road usage. Counties can then use that funding for their own infrastructure improvements.
Road usage is based on “vehicle miles traveled” data collected by the Indiana Department of Transportation. That includes traffic on non-interstate freeways and major thoroughfares.
The proposal wouldn’t solely benefit Marion County — which would contribute to 32% of the regional fund. It would receive 46% of the bond proceeds because of its heavy road usage. Hancock County would contribute income tax dollars to 4% to the fund and receive back 5% in bond proceeds.
Hendricks, Hamilton, Boone and Johnson counties would lose out on money in the fund; the plan calls for Hamilton County to contribute to a third of the regional fund, but only get 18% back in bond proceeds.
Hogsett’s office says the strategy is a way to meet Indianapolis’ growing infrastructure needs — which amount to $160 million per year — without raising taxes. Officials in Marion County have long bemoaned that it is at a disadvantage because its 161,500 daily commuters do not help pay for the roads they use.
According to data compiled by the Indiana Business Research Center, 15,000 Hancock County residents commute to Marion County each workday, while 2,900 come from Marion County to Hancock County.
Bolander said he understands Marion County has road issues, adding it didn’t become a mess overnight.
“Because they haven’t been good stewards of their streets, there’s no reason we should bail them out,” he said.
Over the past two decades, more than 20,000 people have moved into Hancock County. Recent U.S. Census estimates indicate it’s the third-fastest-growing county in the state. With that incremental growth, Bolander said, county leaders have to keep up with the county’s own infrastructure improvements.
“We have different things that come up too,” Bolander said, “It’s not like they have the only need.”
Shelby said losing out on income tax dollars could put the county in a bind financially.
“We struggle to keep up with that growth now,” Shelby said. “So if the growth was used for something else, we’d have to raise taxes to keep up with our own growth, I’m sure.”
In 2005, central Indiana counties agreed to implement a 1% food and beverage tax to pay for the construction of Lucas Oil Stadium in downtown Indianapolis. Half of the tax collected in each of the nine counties pays for stadium bond payments, and half is distributed back to each county’s coffers. Hancock County collects about $500,000 each year from the food and beverage tax.
Bolander said that arrangement was different. That regional agreement didn’t cause the county to lose out on any tax dollars, but it rather has added to the county’s revenue stream. The county council typically spends the money on emergency expenses. Shelby, however, said he still hears grief from local residents about that tax.
“It just seems like local people don’t their taxes raised,” Shelby said, “but if you’re going to raise taxes, they want to make sure their tax money is going for local use.”
Hogsett’s chief of staff, Thomas Cook, told the IBJ Wednesday that Hogsett is open-minded about a possible way forward on regional infrastructure funding — and this is just one of several options.
“This is a concept,” Cook said. “He’s not stating this is the only way forward. Hopefully we’ll see 10 concepts. … We think there’s growing consensus that infrastructure (needs) don’t stop at the county line.”
Hogsett’s goal is to have an idea with regional buy-in ready to present to the state legislature by the start of the 2021 session of the Indiana General Assembly, during which state lawmakers will next draft a two-year state budget. Hogsett’s administration said it would be eager to see action even earlier but acknowledged the legislature doesn’t typically address big structural changes until its longer, budget-writing sessions. Lawmakers just adjourned one of those sessions last month.
The Indianapolis Business Journal contributed to this report.
