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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowWe’re intrigued by a proposal under consideration in the Indiana House that could boost funding for road projects and maintenance in Indianapolis—if voters agree in a referendum to pay higher property taxes.
The proposal is part of a larger bill—House Bill 1461—that had a hearing this week in the House Roads and Transportation Committee. The legislation includes several other road-funding provisions and would set aside $60 million in the Community Crossings grant fund for cities and counties with a population of more than 100,000. For Indianapolis to qualify for that funding, however, the city would need to increase the county wheel tax and excise surtax, something Mayor Joe Hogsett’s administration has been unwilling to do.
Still, Dan Parker, the mayor’s chief of staff, testified in favor of HB 1461. He didn’t specifically support the property tax measure, but he said he was pleased to see lawmakers have a “serious conversation” about “Indianapolis-specific tools.”
What the Hogsett administration would most like to see—and IBJ has endorsed—is a change in a state road-funding formula that currently favors rural communities over urban and suburban ones. That’s because the formula is based on miles of road without consideration of the number of lanes on the road or the amount of traffic on it.
Changing that formula to one that pays out more where there’s more traffic would significantly benefit Indianapolis. But as much as that might make sense—and we sincerely believe it does—it’s unrealistic to expect lawmakers to pass a plan that takes money away from rural counties.
That’s in part what makes the property tax idea intriguing. Under the plan, the money generated by taxpayers in Indianapolis would be used for roads in Indianapolis. It wouldn’t be sent to the state to be divvied up and then redistributed in ways that are detrimental to the city.
Of course, no one wants to pay higher taxes. But residents might be willing to pay more to get better roads. That’s what makes the trigger for the revenue especially important: A majority of voters would need to approve the property tax increase in a referendum for it to be imposed.
The property tax revenue could be used to pay off bonds issued to pay for road funding, something Indianapolis has done in recent years to help fund improvements.
The bill allows a referendum only during a general election, meaning, if the bill passes, the city couldn’t hold a vote until 2026, which would affect property taxes in 2027.
Parker called the referendum proposal “an interesting new tool,” but he did not specify whether the Hogsett administration would use it.
We understand the city’s hesitation. Already, residents are concerned about recent increases in property taxes that are the result in part of rising home values. Other legislation under consideration at the Statehouse and pushed by Gov. Mike Braun aims to reduce property tax bills, meaning this would be moving bills in the opposite direction.
Still, we appreciate that lawmakers are looking for creative ways to help Indianapolis with its road funding problems, even if we think there are better solutions.•
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The property tax is wealth tax and for property owner with a mortgage it is a tax on debt to the wealthy