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Indianapolis officials are continuing to push back on efforts in the Indiana General Assembly to strip the city of a new taxing district in the Mile Square.
Dan Parker, chief of staff for Mayor Joe Hogsett, told state legislators on Tuesday that the city is opposed to a bill that would offer a county-wide income tax increase to replace the downtown economic enhancement district fee approved by the City-County Council in December.
The provision, a small part of House Bill 1121, is tied to a separate piece of legislation that aims to undo the General Assembly’s own work from the waning hours of the 2023 session that created the framework for the economic enhancement district, or EED.
“I’ll get straight to the point: The city respectfully opposes the one specific provision that has been dominating the conversation here,” Parker said during a Senate committee hearing on tax and fiscal policy bills, referring to the proposed income tax increase.
“As partners, we must understand one another to work together on this specific provision,” he said. “We have a difference in philosophy” here.
He said there are three reasons the city is opposed to the measure. First, it could ask more from a taxing perspective of Marion County residents who visit downtown than of those who commute downtown from outside the county. Another, he said, is that it would “be a shift in the unique costs of the Mile Square EED away from those who would benefit the most onto those who might not benefit at all.”
He also said that the city under Hogsett has tried to avoid tax increases by balancing its budget and increasing credit ratings.
The EED was created to act as a funding source for various downtown efforts, including the creation of a a low-barrier homeless shelter on the near-east side, homeless outreach, downtown cleanliness initiatives and safety ambassadors.
Some lawmakers, including bill author Rep. Jeffrey Thompson, R-Lizton, contend Indianapolis would still be able to accomplish its goals for the Mile Square with a county-wide tax.
Thompson said the tax, which would be capped at two-hundredths of 1%, is meant to offer an alternative for Indianapolis if the EED is repealed as part of House Bill 1199, which has not yet been scheduled for a hearing. It would generate about $6 million annually for the city, but without a hard cap on actual revenue, the figure could increase as incomes across the county continue to increase.
“It just gives them an option,” Thompson said during the committee hearing. “I think it’s just more tools in the toolbox and nothing more.”
Under the downtown taxing district ordinance approved by the City-County Council, which is currently capped at $5.5 million annually, single-family homeowners would pay a yearly $250 flat fee starting in 2025. Owners of commercial properties would pay nearly 0.17% of their properties’ gross assessed value, or about $1,681 per $1 million in gross assessed value.
Apartment owners as a group would be hardest hit by the new tax, contributing an estimated $1.87 million to the district. The Indiana Apartment Association represents 280,000 rental units throughout the state, including 5,000 in the Mile Square, according to organization spokesman Charlie Tinkle.
Parker was joined by a representative with Indy Chamber and City-County Council President Vop Osili in opposing the county-wide tax provision. Nobody testified in favor of the measure.
“We believe that property owners in the district should bear the user fee [for] these services,” said Adam Burtner, vice president of government affairs for IndyChamber. “The Chamber simply does not support raising taxes on residents throughout the county for a unique services that property owners support and receive in the Mile Square.”
Osili said he believes it would be difficult for the council to support a tax increase that benefits only the Mile Square when other neighborhoods don’t have dedicated funding streams.
Some Senators, including. David Niezgodski, D-South Bend, and Ryan Mishler, R-Mishawaka, signaled they are apprehensive about the provision; both own property in downtown Indianapolis.
“For anything in my life, [I] have never sought the assistance of others to help me pay for my personal needs,” said Niezgodski. “If I am going to receive something that is going to be of benefit to me and to others, I think those dollars should be paid for by the area that is receiving those added benefits.”
The committee hearing comes as Senate leadership eyes a separate hearing date for the 1199 bill focused on repealing the EED, which was authored by Rep. Julie McGuire, R-Indianapolis. Thompson is listed as a co-author on the bill, as is Rep. Mike Speedy, a Republican from Indianapolis.
Sen. Travis Holdman, R-Markle, told IBJ he is considering either Feb. 20 or Feb. 27 to hear the bill. He said amendments are still being considered, but none have been filed.
Sen. Kyle Walker, a Republican who represents portions of Indianapolis and Fishers, said while there are ongoing conversations about what should be done with the legislation, he is “opposed to the bill in its current form.”
Proponents of the legislation to unravel the EED, which include some downtown property owners, the Indiana Apartment Association and the Indiana chapter of Americans for Prosperity, a conservative think tank, have argued that the provision approved last year was done without transparency and should have been properly vetted in a public forum.
The authorizing language to create the district was slipped into last year’s state budget bill in the final hours of the legislative session and never went through the typical committee hearing process.
Supporters of the repeal have also argued that the city could have established an economic enhancement district under a previously existing law that requires a certain number of signatures from property owners who support the taxing district.
Under that law, a 2018 effort by Downtown Indy Inc. to establish an economic improvement district failed in the face of heavy opposition from the Indiana Apartment Association and a dispute over whether the not-for-profit had collected the required signatures from more than 50 percent of property owners.
Groups including the Indiana Sports Corp., the Indy Chamber and Visit Indy have voiced support for the taxing district, as have businesses including the Central Indiana Corporate Partnership, Elanco Animal Health Inc. and Salesforce.
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Important note in regards to the 2018 effort mentioned at the bottom of the article:
The Apartment Association led an effort in the statehouse to move the goal posts in the middle of the game and increase the threshold to 60% after Downtown Indy, Inc and partners reached the 50%. The current threshold still stands at 60% of signatures in only 120 days – hardly a thoughtful or tenable policy. Which is why no community has sought an EID since this legislation was changed.
Also, how many public hearings will it take for the Apartment Association to stop saying the EED hasn’t been properly vetted in the public forum? Multiple hearings at the city council last fall where no opposition showed up, and a 5 hour House hearing at the statehouse in January where 35 EED supporters showed up to 5 opposed. Not to mention the multiple stories, letters of support, and op-ed’s that have been written on the issue over the last year educating the public. Disingenuous as always…
The IAA is a trash organization, always looking for handouts and shafting Indy residents with the costs of servicing their buildings.
And yet, the city keeps shoveling subsidies to their projects.
Let me guess, in the most recent $1.5 billion dollar budget that spent lots of more money on roads and police, you’re talking about the 680K they spent on a DEI office.
Could have fixed, what, 400 feet of road with that instead? Maybe 500? (INDOT says it’s $12 million to rebuild a mile of highway.)
I’m all for other examples to illustrate the point if you want to list them along with how much they cost in the budget.
@ Aaron:
Just about any investment that The City makes in the multifamily rental space is inherently a “subsidy shoveled into the IAA’s projects”. The IAA represents those who own apartments in Indiana.
Back in 2018, The City should’ve definitely should’ve ignored the fuss that the IAA made about the legitimacy of some of the EID signatures back. It probably would’ve led to a statehouse battle, but that would’ve been the correct thing to do.
Aside from that, though, it’s hard to blame anybody but The State. And I’m not sure why you try to absolve The State of as much responsibility as possible on this one, unless it’s to appease your own political leanings.
City of Indianapolis would have plenty of money for the shelter if these same Republicans weren’t stealing road funding from Indianapolis, forcing them to spend discretionary dollars on roads…
You do realize, Joe, that about 95% of road mileage in Marion County is in fact municipal roads, right? If not Indianapolis, then it’s the responsibility of Lawrence, or Speedway, or Southport, or Beech Grove.
In other words, those massive potholes on Spring Mill Road or Edgewood Avenue have nothing to do with the big meanies at the state level. Any state road funding that is dedicated to Indianapolis (or any other municipality) is a privilege that should not be expected, since the state’s responsibility in terms of road maintenance is first and foremost state-owned roads. And I say this while fundamentally agreeing with the left in principle that the state is overstepping its boundaries by trying to stop Indiana cities from regulating things that are not of state-wide importance (like the latest dustup with puppy mills).
The City would be in a better position to fund regular road maintenance if it weren’t so low density. But even that is a weak excuse, because, unless I’m reading the Census numbers wrong, Indy has more people now than it ever has under Unigov. It’s getting denser, yet somehow is more strapped for cash to maintain roads. Could it be that Indy is flying to close to the sun, trying to achieve stupid lofty unnecessary things like Paris Climate Accords or Vision Zero or eradicating racism, while losing sight of things that actually matter to the average person…like usable roads?
Lauren, at least you’re consistent and never let the facts get in the way of tilting at some windmills.
You are correct, the state of Indiana collects the gas tax money and directs around 70% of it to state highways. I’ve driven down some very nice state highways getting far less traffic than roads like Kessler or Stop 11. These state highways got the bulk of the most recent gas tax increase.
The only source of revenue that counties are allowed to implement on their own to improve roads is a wheel tax, which is capped at $25 million dollars. How far do you think that goes in the most populous counties in Indiana, including Marion?
Marion County pays in $28 million dollars to the Community Crossings Matching Grant Program. By statute, the most that any city can get is $1 million dollars. So Marion County, even if all those excluded cities got funding in the same year, would still be a massive subsidizer of the rest of the state.
Also, don’t forget that when the state of Indiana passes out road funding, it intentionally disregards the width of a road. So a six lane highway like Keystone gets the same amount of state reimbursement as a country road in Jennings County.
Finally, don’t forget the most recent entry. When a city looks at a road and the declining traffic numbers over five decades and decides to drop a lane since the federal government will pay for the vast majority of the cost of the project (thereby reducing everyone’s maintenance costs in the future), some state legislator decides that he is smarter than everyone else and votes to cancel the project because he can because he’s a lawyer.
And you think the problem is the Paris Climate Accords? As John McEnroe once said, you cannot be serious. The fix is simple – the state needs to collect more money, and it needs to account for both road width and mileage in the calculation. We just don’t have legislatures with the will to do hard things unless they get sweet, sweet campaign contributions from lobbyists to steel their resolve.
The state loves to interfere with the largest metro area and our legislature is apparently bought and paid for by lobbyists – whether it’s against expanded public transportation that the city VOTED TO EXPAND and gone would be federal funding to do this will dry up and go away. They also approved dismantling the paltry wetlands protections we had in place due to the construction lobby – and we’re getting ready to protect our state’s puppy mill industry because a few cities (rightfully so) fought to ban them. The state that works ONLY works for the people that can afford lobbyist and or an also ran law concocted with some fringe out of state group to keep the culture war flames fed. The city also tried to expand tenant rights because our state laws HIGHLY favor the apartment lobbyists and that too was struck down in ANOTHER Indianapolis specific law.
The governor supported this new fee for downtown, but the lobbyists strike again. We have had a couple of decades without balance and one-party rule for too long. Absolute power corrupts – and that goes for any political party. This legislature holds up our supposed surplus as why this one-party rule is good for the state – but anyone can see that it’s because they CHOOSE to underfund almost everything they touch – kicking the can down the road (or into a pothole due to lack of funding).
To Mr. Parker and Mr. Hogsett,
Your comments about caring about the community for this repeal are a joke. If you cared so much about the community you wouldn’t have aproved RDOOR’s act to plop the homeless shelter next to our home (NEXT TO) . And if you think this will not negatively impact our values, and those on Shelby, you might consider being one of the shelters clients. You only care about your personal interest. Based on your comments of visitors, raise the sales tax in the area.
If I was so wrong , our dear mayor would have responded directly to one of my six letters to him.
I’m 74 and put all my retirement and my commitment into what had great potential.
Come buy us out if you care.
I get the concern over the shelter, but you can drop your Boomer sense of entitlement. Property ownership is a risk, you are not entitled to a buyout due to your perception.
Always easy and fun to spend other people’s money. It’s a money grab, pure and simple. And I would suggest that the majority of those voting on this do not live in center township. Boss Hog doesn’t.
You do realize that it’s the State trying to shift the cost onto the residents from corporations, right? The reason Republicans are yanking the city around is because out-of-state property owners in Virginia got pissy.