House panel takes corporate tax increase out of mass transit bill

A House committee stripped a corporate tax increase out of a bill that would authorize an expanded mass transit system for central Indiana.

But the committee left language that lets local officails increase individual income taxes to pay for the multi-county system, if voters agree.

“None of these counties are forced to participate,” said the bill’s sponsor, Rep. Jerry Torr, R-Carmel. “This bill provides nothing but local option, local control for local elected officials to have a mechanism to create an expanded transit system for central Indiana.”

The House Roads and Transportation Committee passed the amended bill 11-1. Chairman Ed Soliday, R-Valparaiso, said he’s not sure if the bill will head next to the Ways and Means Committee, which considers fiscal issues, or go straight to the full House.

If the House approves the bill as amended, it will set up a debate between the Republican-controlled chambers about who pays for expanded transit.

As passed by the Senate, the bill would let local officials in six central Indiana counties—Delaware, Hamilton, Hancock, Johnson, Madison and Marion—seek voter approval to raise income taxes and creates a new local corporate income tax. The Senate version of the bill also requires that user fares fund at least 25 percent of the co—st of operating the bus system.

Sen. Brent Waltz, R-Indianapolis, pushed to include the corporate tax increases in the legislation after a number of larger companies—including Eli Lilly and Co.—lobbied for an expanded bus system. Business leaders say it’s necessary to move central Indiana workers to jobs.

“I always thought it was curious that some of the large corporations that had been talking about the need for mass transit weren’t paying any taxes toward it,” Waltz said. “Being able to have a fairer, more comprehensive tax structure takes the right approach.”

But on Wednesday, Soliday said the corporate income tax provisions wouldn’t “add very much” to the funding structure for the project. And he said adding a new tax to the state’s existing local tax structure might not be a good idea.

So on his suggestion, the committee removed the language. Lawmakers also added a seventh count,  Hendricks, to those that could participate and stripped out some controversial labor restrictions that had been approved by the Senate.

However, the bill retains a provision that bans the counties from using the money to build light rail. Rep. Tom Saunders, R-Lewisville, said he’d like to see that restriction removed.

“I don’t know why we’re tying their hands regarding rail,” Saunders said. “If that’s a decision down the road they need to make, I don’t know why we would make them come back at a point to address that.”

Indianapolis Mayor Greg Ballard, a Republican, told lawmakers Wednesday he’d like to see legislation with as few restrictions as possible. But he supported the bill, saying it’s “important to get our toe in the door.”

“Do I expect to get everything I want? Probably not,” he said.

But he said the legislation would give his community and others the freedom they need to develop a better mass transit system, one that would ferry lower income workers to jobs while attracting young professionals to the city.

“We see a clear trend developing in cities across America,” Ballard said. “People want to be able to visit local shops, restaurants, galleries, sports. And they want to do it on a bike, on a walking trail, they want to do it on good mass transit.”