Mass Transit Bill Relies On TIFs For Financial Support

The proponents of a regional mass transit plan are just getting started with their handiwork over at the General Assembly and they're already lying to the public about how they plan to finance the initial $1.3 billion plan to expand bus service in the Indianapolis metropolitan area and build a new light rail service connecting Noblesville to downtown Indianapolis. The legislation authorizes Marion County and nine neighboring counties to put a referendum on the ballot as soon as a special election can be held this November to impose a regional 0.3% income tax to finance construction of a metropolitan mass transit system. The problem is that the legislation's proponents understand that the income tax will be lucky to provide a large enough revenue stream to pay the bonds that will be issued to finance the initial construction of the system, which will total at least $1.3 billion over the next 10 years and more than $2.5 billion over the next 25 years. At least half of the initial expenditures will go towards building the light rail system that will serve only a small portion of the metropolitan area.

Tucked away in HB 1011 is a provision that will allow the newly-created metropolitan transit district to create a TIF district within a half mile of "a fixed guideway transit corridor," a term defined under federal law as including "any transit service that uses exclusive or controlled rights-of-way or rails, entirely or in part. The term includes heavy rail, commuter rail, light rail, monorail, trolleybus, aerial tramway, inclined plane, cable car, automated guideway transit, ferryboats, that portion of motor bus service operated on exclusive or controlled rights-of-way, and high-occupancy-vehicle (HOV) lanes." Yes, our property taxes will be cannibalized by even more TIF areas if the metropolitan mass transit plan is approved. TIF areas already consume more than 10% of the tax base of Indianapolis. The proposed mass transit routes will cut through some of the city's most developed areas with some of the highest assessed property values.

The TIF district must still be approved by the Indianapolis City-County Council, but if past and present actions are any indication, the elected members of that body will have no problem creating more TIF districts despite the detrimental financial impact TIF districts have caused to local governments which rely on property taxes, particularly our schools. The legislation will also allow the property tax levy currently determined by IndyGo's board to be transferred to the newly-created metropolitan mass transit board, which will have suburban membership as well. The City-County Council will have even less oversight over the large sums of money that will be raised within the county to fund the mass transit system than it currently has, which is already very minimal.

Despite all the media hype given to this mass transit plan, the proponents have offered no concrete evidence to demonstrate that the public is willing to give up their cars and utilize a very costly public transit system that will in all likelihood increase their commute time to and from work by thirty to forty percent. As the Cato Institutes's Randal O'Toole points out, mass transit only works when those who commute by automobile decide "to make major lifestyle changes and sacrifices in their day-to-day lives." O'Toole cites statistics showing that only 0.3% of passenger travel in Indianapolis currently relies on mass transit. Only about 2,000 people use mass transit to commute to work in downtown Indianapolis. Even if the mass transit system proposed would double the number relying upon it, a fete not accomplished by any American city since World War II O'Toole notes, the numbers aren't sufficient to relieve the traffic congestion on highways or improve the viability of Indianapolis' downtown. O'Toole is particularly critical of the $625 million to be spent on light rail. To prove his point, he observes that it would be cheaper to provide every daily commuter a new Toyota Prius every other year for the rest of their lives than to build a light rail system:

The Task Force’s proposal to spend $625 million on a rail line is especially questionable. Why should the region spend nearly as much money on one transit route as all the other routes put together? Rail transit is so expensive that most regions that have built new rail lines cannibalized their bus systems to pay for the trains.

After Los Angeles began building its first rail lines, transit ridership declined by 17 percent until the NAACP sued to restore bus service to minority neighborhoods. Since Portland, Oregon, built light rail, the share of the region’s commuters who take transit to work declined from 10 to seven percent. Similar stories can be told about Atlanta, Baltimore, Buffalo, Dallas, Miami, San Francisco, St. Louis and many other cities that built rail lines.

Commuter rail lines in cities comparable to Indianapolis, including Albuquerque, Dallas, Ft. Lauderdale, Nashville, Portland and Seattle, are so expensive and carry so few people it would cost less (and be better for the environment) to give every daily round-trip rider a brand-new Toyota Prius every other year for the rest of their lives.

The silliness of the proponents knows no bounds. My own state representative cited a statistic in support of the plan that unbelievably claims the mass transit system will actually cost nothing because every $1 spent creates $4 in increased business sales. As O'Toole observes, the development that occurs along mass transit lines simply begets more subsidies by local units of government to spur that development. That is precisely why the proponents plan to rely on newly-created TIF districts to use property tax revenues to subsidize development along mass transit routes. "Portland has given hundreds of millions of dollars in subsidies to developers along its light-rail and streetcar lines," O'Toole writes. The reality is that the only reason the light rail system is included is to dramatically increase the costs of the proposed mass transit system in order to attract more federal dollars from Washington, which rewards communities who come up with the least efficient systems of providing public transportation.