Central Indiana Mass Transit
Watchdog Indiana Home Page Indiana General Assembly & Governor Ratings Legislative Voting Record
House Bill 1073 was filed during the 2012 General Assembly session at the request of the Central Indiana Transit Task Force, which would like taxpayer money to double the Indianapolis bus service and add train service from Noblesville to downtown Indianapolis. HB 1073 was defeated by a 10-11 vote in the House Ways and Means Committee.
Some significant HB 1073 provisions included those listed next.
1. A county or city council (other than the city-county council of Marion County) may elect by ordinance to provide revenue to a public transportation corporation from the city's or the county's distributive share of county adjusted gross income taxes, county option income taxes, or county economic development income taxes.
2. The establishment of a Regional Transit Authority (RTA) and a Metropolitan Transit District (MTD) is authorized by specified eligible counties through local public questions (referendums).
3. Eligible authorizing counties include Marion, Boone, Hamilton, Hancock, Hendricks, Johnson, Madison, Morgan, and Shelby. Other counties that are adjacent to an authorizing county may become members if the executive committee of the RTA approves and a local public question (referendum) is passed.
4. The establishment of a MTD and a RTA are allowed if the authorizing body of an eligible county adopts an ordinance to place a local public question on the election ballot, the majority of county voters at the next general election vote yes on the ballot proposal, and Marion County is one of at least two counties that adopt the proposal. However, the MTD and RTA are not established if Marion County and Madison County are the only counties adopting the MTD. A local public question may not be placed on the ballot more than two times in any seven year period.
5. The territory of the RTA consists of all the incorporated and unincorporated territory of all of the eligible counties. The MTD consists of all of the authorizing counties in which a local public question is approved by the voters, but the territory of the MTD consists of all the incorporated and unincorporated territory of all of the authorizing counties.
6.. Each county that becomes a member of the MTD remains a member until (1) the county fiscal body adopts a resolution announcing the county's intent to withdraw its membership in the district and (2) the county's resolution of withdrawal is approved in resolutions adopted by the fiscal bodies of at least two-thirds of the MTD member counties.
7. A county that has passed the local public question may impose an additional county economic development income tax (CEDIT) rate to pay the county's contribution to the funding of the MTD. The CEDIT rate may not exceed what is needed to meet the county’s recommended MTD contribution and is limited to no more than 0.2%.
8. The metropolitan transit district may receive federal or state aid and administer that aid.
9. Both the MTD and the RTA are to be a bodies corporate and politic separate from the state and other political subdivisions, but they will exercise powers that are essential governmental functions.
10. The power to govern the RTA is vested in a regional transit authority board. If five or more counties authorize the RTA, two members each are to be appointed by the county executive of each authorizing county. If it is fewer than five, three members each are to be appointed. The county executive of a county that is a member of the RTA, but did not vote to authorize the MTD, will appoint one member. The director of the Indianapolis Metropolitan Planning Organization will be a member and so too will the Commissioner of the Indiana Department of Transportation or a designee. The full RTA board may vote and provide oversight on RTA matters that are not related to the MTD, with each RTA board member having one vote.
11. An RTA board member must have knowledge and at least five years professional work experience with a for-profit or nonprofit entity in business, finance, regional economic development, or transportation. An RTA board member serves at the pleasure of the appointing authority that appointed the member. None of the RTA board members are required to be elected officials. The RTA board may not levy any tax.
12. The governing body of the MTD is to be the RTA executive committee. The RTA executive committee consists of the RTA board members appointed from authorizing counties. There are a total of 100 votes among the members of the executive committee when voting on matters related to the MTD. The number of votes each member has is based on the financial contributions to the RTA by the authorizing counties.
13. The MTD is authorized to (1) construct or acquire any public transportation facility, (2) provide public transportation service by operating public transportation facilities, and (3) issue bonds and otherwise incur indebtedness. The MTD executive committee may issue debt to acquire real or personal property; acquire, construct, or improve projects; pay the cost of planning and development of equipment or facilities; or to fund or refund bonds or other indebtedness. All instruments of debt must mature within 25 years, and the total amount of bonds issued may not exceed 25% of the total financial contribution made by authorizing counties in the year preceding the bond issue. The MTD may not levy a tax.
14. The Indiana Finance Authority (IFA) is authorized to issue bonds to acquire any obligations issued by the MTD. The IFA is also authorized to issue bonds that the MTD can use to plan, design, acquire, construct, enlarge, improve, renovate, maintain, equip, finance, operate, and support public transportation systems.
15. If the MTD and RTA are established, the Central Indiana Regional Transportation Authority (CIRTA) will be abolished and its powers and duties transferred to the MTD for matters related to the MTD and to the RTA for matters not related to the MTD. All of CIRTA’s assets, debts, property rights, equipment, records, personnel, and contracts will transfer to the MTD. CIRTA’s goals include plans to connect Indianapolis with the areas that surround it and development of federal, state, and local funding sources for alternative transportation.
16. The Indianapolis Public Transportation Corporation (IPTC), which is known as IndyGo, will be abolished and its powers and duties transferred to the MTD if the MTD is established. The taxing district for the IPTC will continue to exist, and the revenue from any tax will transfer from Marion County to the RTA executive committee to pay costs for carrying out its powers and duties. Marion County will assume, defease, pay, or refund all indebtedness or lease rental obligations of the IPTC, and Marion County may levy property taxes tax in the IPTC’s taxing district to pay these costs. On December 31, 2010, IPTC had notes payable totaling $6.9 million, bonds payable totaling $9.3 million, and total assets valued at $118.5 million. The IPTC provides fixed-route bus services, direct-link bus services, and reservation-based bus services for the elderly and disabled.
17. Marion County would be able to issue bonds and levy taxes to pay the bonds for the MTD . This power currently is granted to the IPTC. The total amount of bonds issued and scheduled to be paid during any year may not exceed an amount equal to 10% of the total financial contribution to the MTD.
18. If the RTA is adopted, the RTA’s power to govern is vested in its board, and the executive committee of the board receives the powers and duties of the IPTC and CIRTA for matters that do not relate to the MTD. The executive committee is to submit its budget and proposed property tax levy to the Marion County fiscal body for the fiscal body to adopt. The RTA’s executive board may not exercise the power of a public transportation corporation to issue bonds.
19. The executive committee must make written findings on the value of facilities put into service within each authorizing county, the total amount of capital needs of the MTD, the annual amount of capital costs to be allocated to each authorizing county, the total amount of operating needs of the MTD, and the annual amount of operating cost to be allocated to each authorizing county.
20. Before adopting the annual budget of the MTD, the executive committee must submit a copy of its proposed budget to the fiscal body of each authorizing county for review. Each county fiscal body must review the proposed budget submitted by the executive committee. The executive committee may not take final action on the MTD budget until the proposed budget is approved by the county fiscal body.
21. If the MTD is unable to agree with the owners, lessees, or occupants of any real property necessary for a rail line, terminal, or other public transportation facility, the MTD may proceed to procure the condemnation of the property.
22. The RTA and the MTD are subject to the public access laws and audit by the State Board of Accounts.
Taxpayer Friendly legislation is results-oriented, compassionate, and fiscally conservative.
The Taxpayer Friendly HB 1073 provisions are listed next.
1.The voters in the specified eligible counties would decide through local public referendum questions whether or not to establish or join a Regional Transit Authority (RTA) and a Metropolitan Transit District (MTD). The importance of voter approval for costly transit initiatives is demonstrated by three recent proposed projects - an Indiana Commerce Connector east and south of Indianapolis; the Illiana Expressway east of I-65 in Northwest Indiana; a Northern Indiana Regional Transportation District in Lake, Porter, LaPorte, and St. Joseph counties. Most developer-influenced local elected officials extolled the economic development benefits of these three projects, while the great majority of local citizens did not see the benefit of low-wage and low-benefit hospitality jobs offsetting the toll and tax costs and destructive sprawl of new road and transit construction. The Governor withdrew the Commerce Connector and Illiana Expressway projects in response to widespread public opposition. Two counties soundly voted down the Northern Indiana Regional Transportation District, while two other counties ignored the General Assembly requirement that they conduct costly and futile referendums. The collective wisdom of the voters is necessary to confirm if the developer-supported RTA and MTD are good public policy.
2.A county that has passed the local public question may impose an additional county economic development income tax (CEDIT) rate not exceeding 0.2% to pay the county's contribution to the funding of the MTD. The income tax funding source, which is based on the ability to pay, is preferable to regressive funding sources such as the sales tax. The Hoosier working family already has a high cumulative sales tax burden that approaches immorality.
3.The RTA board and the MTD may not levy a tax.
4.The RTA executive committee, which would be the governing body of the MTD, would be composed of members who serve at the pleasure of the authorizing county executive that appointed them.
5.All instruments of MTD debt would mature within 25 years, and the total amount of bonds issued would not exceed 25% of the total financial contribution made by authorizing counties in the year preceding the bond issue.
6.The RTA executive committee would have to submit its budget and proposed property tax levy to the Marion County fiscal body for the fiscal body to adopt.
7.The RTA executive committee would not exercise the power of a public transportation corporation to issue bonds.
8.The RTA executive committee could not take final action on the MTD budget until the proposed budget is approved by the county fiscal body.
9.The RTA and the MTD would be subject to the public access laws.
10. The RTA and the MTD would be subject to audit by the State Board of Accounts.
The Taxpayer UNfriendly aspects of HB 1073 are listed next.
1.If a county fiscal body adopts a resolution announcing the county's intent to withdraw its membership in the MTD, the county's resolution of withdrawal must be approved in resolutions adopted by the fiscal bodies of at least two-thirds of the other MTD member counties. The approval of a county’s voters must be obtained by referendum without input from any other county before the county becomes an MTD member. It is not right for a county’s decision to withdraw from the MTD to be dependent on the fiscal bodies of other counties.
2.An RTA board member must have knowledge and at least five years professional work experience with a for-profit or nonprofit entity in business, finance, regional economic development, or transportation. One wonders why a teacher, farmer, tool and dye maker, labor union official, and other everyday Hoosiers who would be paying the bills are not suitable RTA board members. It appears that developers and their supporters want to dominate RTA and MTD decision-making.
3.The MTD may condemn property if it is unable to agree with the owners, lessees, or occupants of any real property necessary for a rail line, terminal, or other public transportation facility. It is not right for the unelected RTA executive committee, which is the MTD governing body, to have condemnation power.
4.The IndyGo bus service had $71.4 million in total 2010 revenues. Operating revenues from passenger fares and advertising totaled only $10.0 million, while taxpayers footed the bill for the remaining $61.4 million (or 86%) of total revenues. Operating expenses totaled $63.5 million, resulting in an operating loss of $53.5 million. The Central Indiana Transit Task Force wants to use the RTA and MTD to double the Indianapolis bus service from 122 to 232 vehicles, spending $667.8 million for capital improvements plus $110.4 million annually in operating expenses. Because of insufficient demand, doubling the bus service would worsen the IndyGo operating loss and result in a significantly higher annual taxpayer subsidy. On one level it may be compassionate to double the bus service for non-drivers, but isn’t the "compassion test" failed if at least $50 dollars a year is taken from the working poor to further subsidize a service that the great majority of them would never use?
5.The MTD could receive federal aid to add commuter train service from Noblesville to downtown Indianapolis. The Central Indiana Transit Task Force has a low-ball estimate that this rail service would cost $625.4 million to build and $16.8 million to operate annually.
A balanced perspective on rail service can be obtained by reading the March 24, 2010, Cato Institute Policy Analysis No. 663 "Defining Success: The Case against Rail Transit" (http://www.cato.org/pub_display.php?pub_id=11608) and the March 18, 2011, Victoria Transport Policy Institute paper "Contrasting Visions of Urban Transport" (http://www.vtpi.org/cont_vis.pdf). The Watchdog Indiana conclusions regarding the MTD provision of commuter train service from Noblesville to downtown Indianapolis are summarized next.
A. The MTD rail service would be like every other U.S. rail transit line and not come close to covering its operating costs, much less its total cost.
B. Few motorists would forego the convenience of their cars and use the MTD rail service. What little intermittent traffic congestion exists in the Indianapolis metropolitan area pales in comparison to Atlanta, Charlotte, Richmond, Washington, Philadelphia, New York City, Boston, Chicago, and San Francisco. Major Moves projects in Central Indiana will continue to be completed in the coming years to alleviate traffic congestion whether or not the MTD rail service is built. Because most families (especially those with young children) will continue to prefer single-family homes in a suburban environment, few motorists want to give up automobile travel to get to their place of employment. Factors such as an aging population, rising fuel prices, increasing urbanization, transit service improvements, and more transit-oriented development will do little to offset the "American Dream" of home ownership and its reliance on cars for transportation. While a few persons may prefer to ride trains instead of drive cars, huge taxpayer subsidies in response to a mere preference cannot be justified.
C. The MTD rail service would not be cost effective. Central Indiana Hoosiers do not live or work in environments dense enough to need any higher-capacity public transit than buses. Central Indiana is like the rest of the nation where jobs are so spread out that less than 10 percent are in central city downtowns and only another 20 to 30 percent are in suburban downtowns or other major job centers. Rail cars, track, and other rail infrastructure must be completely replaced about every thirty years. In January 2010, U.S. Transportation Secretary Ray LaHood abolished cost effectiveness rules for federal transit grants, saying, in effect, that he was willing to fund rail projects no matter how much money they waste. It is feared that the MTD would be like Denver where, soon after persuading voters to approve a tax increase to build 119 miles of new rail lines, it was admitted that rail costs were 68% higher higher than projected and, even if the lines could be built, there wasn’t enough money to operate them.
D. The MTD rail construction would not significantly stimulate unsubsidized economic development. Any high-density housing, retail shops, office development, and park-and-ride facilities along the MTD rail transit line would likely entail subsidies to developers, mostly in the form of tax increment financing (TIF). Land value increases near MTD transit stations might minimally increase property tax revenue to local governing bodies only if the land is not included in a TIF district. A literature review commissioned by the Federal Transportation Administration found that "urban rail transit investments rarely ‘create’ new growth"; at most, they "redistribute growth that would have taken place without the investment." The main beneficiaries of this subsidized redistribution from the MTD rail service would be downtown Indianapolis developers, which explains why they strongly support HB 1073. It is instructive to note that, to date, Portland has spent nearly $3 billion building light rail lines and nearly $2 billion subsidizing developments along the light rail and streetcar lines.
E. The MTD rail service would have a negligible impact on the community’s economic productivity. No jobs are going unfilled because there is no MTD rail line. The ongoing taxpayer subsidies needed to operate the MTD rail service would be more efficiently spent and respent in the private sector.
F. To a very, very small extent, the MTD rail service might provide benefits including congestion reductions, road and parking facility cost savings, consumer savings, reduced accident risk, improved mobility for non-drivers, reduced chauffeuring burdens for motorists, energy conservation, pollution emission reductions, improved public fitness and health, and the attainment of social equity objectives. However, these benefits would be dearly purchased. Over the past four decades, American cities have spent close to $100 billion constructing rail transit systems and many billions more operating those systems. The agencies that spend taxpayer dollars building these lines almost invariably call them successful even when they go an average of 40 percent over budget and, in many cases, carry an insignificant number of riders.
G. Federal funds would be needed to build the MTD rail service. This MTD federal funding would worsen the "Red Menace" threat to our way of life because it would increase our runaway federal debt. The federal government borrowed 36 cents of every dollar it spent in 2010. The federal debt is now more than $15 trillion. If any future federal funding is available for rail transit systems, it will need to be allocated based on legitimate need. The Indianapolis metropolitan area would be a low priority for scarce federal rail transit dollars because of limited traffic congestion. Therefore, the only source of MTD rail service funding would be budget-busting federal earmarks. This MTD rail service federal funding irresponsibility must be a concern to every Hoosier who values fiscal patriotism.
IN CONCLUSION:House Bill 1073 is Taxpayer UNfriendly because the Metropolitan Transit District could receive federal aid to build a commuter train service from Noblesville to downtown Indianapolis. If the MTD were not allowed to build a rail transit system, HB 1073 would be Taxpayer Neutral.
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