Last week, the Indy Star reported that a proposed 0.25% local income tax in Marion County to support public transit expansion advanced (the article and my comments are here: Public Transit Income Tax Advances in Indy).
The tax passed the City-County Council last night. This 0.25% income tax will inject an estimated $54M per year into the public transit system, often thought of as one of the nation’s worst for a major city. 6 counties (Marion, Hamilton, Hancock, Johnson, Delaware and Madison) currently have the option of holding a referendum on a local income tax for transit expansion. This tax will bring the total local income tax rate for Marion County from 1.77% to 2.02%.
The Indy Star published an interesting and balanced article today on the Indianapolis Convention Center, its expansion over time (there is a great interactive infographic on its expansions since 1972 at the end of the article), and its effects on tourism and visitation in Indianapolis.
The article makes the case that the Convention Center has largely been effective, and kept Indianapolis highly competitive as a second-tier destination, bringing in the desired revenue and visitation into the city.
However, at the same time, the article points out some of the long term challenges. First, convention center expansion in itself is a very expensive arms race — just as Indianapolis invests in expansion, its competitor cities are doing the same thing, and competing over essentially the same visitors. Second, the article points out some challenges more specific to Indianapolis. Indy is perceived as a bland Midwestern city — friendly, walkable, but not very exciting. It doesn’t have many natural assets, and those that it does have (the White River, for example) are very difficult to capitalize on. And of course, RFRA has harmed the state’s reputation and had some effect on convention business.
One thing that the article never addresses is the benefits and costs that the Convention Center and tourism in general has on residents. I have never seen good statistics (anywhere, not just with respect to Indianapolis) on how much tourism taxes (lodging, car rental, ticket taxes, and food and beverage) cost residents (vs. visitors). Clearly lodging and car rental taxes are paid primarily by visitors (although they are also indirectly paid for by businesses whose employees and consultants travel to Indianapolis). But what about food and beverage taxes? How much new revenue do they actually bring in, and how much goes to local residents?
I’ve always found this area (Lafayette Sq in Indy) fascinating in kind of an urban-wasteland sort of way. It will be interesting to see what they are able to do with this CRED investment. With that much already built environment, it will be a tall order for redevelopment. I like the idea of taking up a lot of the unused concrete and putting in grass and trees.
Incidentally this effort follows a kickoff last year to a major rebranding effort for the whole Lafayette Square area that includes gateway sculptures, sidewalk connectors, wayfinding markers, and bus shelters. The architectural firm Schmidt and Associates (which has also done some impressive work in Bloomington, and is responsible for the amazing Mass Ave redevelopment in Indy) is the lead designer. The Indy Star published a picture of one of the gateway markers: Lafayette Square area: Passport to the world.
The money will come from a mix of local funds, grants, and private investments, and will be funneled through the Local Initiatives Support Corporation. $800K will be provided through revenues raised from the Lafayette Square Community Revitalization and Enhancement District (“CRED”), which captures some state income tax, county option income tax (COIT) and sales tax generated in the district. CREDs are sort of like TIF districts (except that the revenue source is income and sales tax, rather than property tax), and are available for investment in downtown areas and investment in areas that have been severely impacted by an economic downturn or loss of a major employer. Qualified investments in CREDs also entitle the investor to a 25% tax credit (if approved by the Indiana Economic Development Corporation and if the investment is not simply moving operations from a different part of the state).
The first CRED was actually established in Bloomington, in order to redevelop the site vacated by Thomson Consumer Electronics. Now, there are around 9 CREDs around the state, including a second CRED in downtown Bloomington.
Here are a couple of other interesting references on CREDs:
The Indy Star had an interesting article today on a proposed plan by the Indianapolis Public Library to invest $58.5M across 11 different branches, raised by bonds and paid for via property tax levies (“$58M in bonds, no referendum? Indy library project raises questions“). The issue raised was why the $58.5M proposal would not have to go through the referendum process, which has been required for capital projects over $12M since 2008.
The answer, which is both legally correct and widely accepted, is that the Indianapolis Public Library proposal, although presented as a single coherent package, is not a single capital project. It is spread over 11 different branches, paid for by 8 different bonds spread over 6 years. In fact, it would not even be feasible to implement the proposal as a single project, as different branches would be ready for the renovations at different times.
The article pointed out, though, that while it was appropriate to consider this proposal across multiple projects, none of which reached the $12M level required for a referendum, other governmental units could theoretically attempt to subvert the referendum requirement by breaking projects down into separate pieces all of which individually fall beneath the $12M threshold but collectively would have required the referendum.
The article also discussed an example in which the City of Lebanon managed to split a $4.5M aquatic center project into smaller projects, none of which individually required that the city go through the petition and remonstrance process. Petition and remonstrance is a process that allows taxpayers to object to a capital project over $2M (and less than $12M, which requires a referendum), and results in a race between supporters and opponents of a project to get the most petition signatures.
One important consideration, which I was surprised was not mentioned in the article, is that there IS an advantage (from the perspective of units of local government) to going through a referendum: property tax levies that are approved through the referendum process are exempt from the circuit breakers (property tax caps). Debt service levies that do not go through a referendum are within the property tax circuit breakers.
You may remember that this issue had some application close to home. The 2008 general election in Monroe County included a referendum in the Richland-Bean Blossom School Corporation to raise $35M for several school building projects (the Junior High and the High School). The referendum failed. In 2009, however, the RBBSC school board passed two separate $10M bond levies, in order to make improvements to the Junior High School and the High School, separately. Each of these projects were below the $12M referendum threshold. Both added to taxpayers’ property tax bills. However, since they didn’t go through the referendum process, these bond levies were inside the property tax circuit breakers, and resulted in some circuit breaker revenue loss to all units of local government serving the Richland and Bean Blossom townships.
Complete Streets is a transportation policy framework in which road networks are built with the needs of ALL system users in mind, including automobiles, bicyclists, pedestrians, wheelchair users, public transit users, users of all ages and abilities, etc., and is focused in making our cities, towns, and neighborhoods more safe, healthy, and livable. This is obviously a major policy shift from traditional public works engineering principles that are geared around moving as many cars from one point to another point.
The Complete Streets Coalition provides additional information about the benefits of complete streets policies, and provides some model policy language.
Indianapolis is not in the vanguard, however, with its Complete Streets. Several other Indiana cities have already passed their own Complete Streets ordinances: