By Joseph S. Pete, Daily Journal of Johnson County
Commuting to work in Indianapolis would be costlier if some state and city officials get their way.
The financial woes of the Indianapolis Capital Improvement Board, which oversees Conseco Fieldhouse and Lucas Oil Stadium, have sparked discussion of increased entertainment taxes but also revived talk of an income tax of 0.25 percent for people who work in Indianapolis but live outside the city.
A commuter tax is bound to come up again in the future at the General Assembly because the economy will cause revenue shortfalls, a state representative said. Such a tax would affect about a fourth of Johnson County's population.
An estimated 30,832 Johnson County residents drive into Indianapolis to work daily, according to the Indiana Business Research Center.
Indianapolis City-County Council President Bob Cockrum suggested a commuter tax as a way to solve the improvement board's debt of $37 million. Officials are leaning more toward other ideas, including increasing taxes on Pacers and Colts tickets, he said.
But the idea of a commuter tax deserves consideration, since property taxes will remain off the table, Cockrum said.
"We provide services, such as road maintenance and public safety, to the people who come here to work every day," Cockrum said. "A fee, which I guess some would call a tax, would be a way to recoup those costs."
The state legislature would have to approve a commuter tax. The idea has been brought up repeatedly but never has gone anywhere, Cockrum said.
In 2002, for instance, the Indianapolis Chamber of Commerce-sponsored Marion County Tax Alliance suggested creating an advisory council to investigate the value of a commuter tax.
This year, State Rep. Bill Crawford, D-Indianapolis, proposed a statewide commuter tax, which was defeated in committee.
Under Crawford's proposal, a county council could impose a "county employment opportunity fee" of up to .25 percent for nonresidents who work in a county. A commuter who made $42,000 would pay $105 more in income taxes.
Counties could use the extra money to pay for economic development, to fund construction projects or to pay down debt.
Though all 92 counties could impose the tax, Indianapolis would be the big winner with more than $18 million in new revenue a year, according to the Legislative Services Agencies. More than 154,000 residents from surrounding counties work in the city.
By comparison, about 9,700 people commute from surrounding counties to jobs in Johnson County, according to the Indiana Business Research Center. Johnson County would bring in about $818,000 a year from such revenue if the county council were to adopt such a tax.
A proposed commuter tax would face steep odds in the legislature, State Rep. Woody Burton said.
Lawmakers in the nine counties surrounding Indianapolis likely would band against it if it got out of committee, the Greenwood Republican said.
"Nothing is impossible, and there's no way to predict what might happen," he said. "I would fight vigorously against such a tax. The people have made it clear that they don't want any new tax increases, that what they want is spending cuts. This would make a lot of people upset."
A commuter tax would be unfair to out-of-county workers who already support Indianapolis by eating at restaurants, shopping at stores and going to sports games and other entertainment, Burton said. Those who live outside the city limits pay sales and other taxes to the city.
Johnson County residents, for instance, already pay a 1 percent food and beverage tax that funds Lucas Oil Stadium and an expansion to the Indiana Convention Center, whether they eat in the city or closer to home, Burton said.
Part of the reason the city will need more money from a commuter tax or another source is that the Indianapolis Convention and Visitor Bureau will need more sales staff to help get bigger conventions, Cockrum said.
"It's the same story as with Lucas Oil, which is twice the size of the RCA Dome," he said. "They got the money to pay for the facility itself, but they didn't line up the revenue to pay for the increased operating costs.
"They didn't realize how much it would cost to run, and that's why there's a need to find the money somewhere."
Greenwood resident Bruce Armstrong, who commutes daily to Allison Transmission on the westside, said a commuter tax wouldn't be fair. Residents in neighboring counties benefit from the proximity of Indianapolis, but they already pay enough.
"I support the city with taxes every time I go out to eat or whenever I buy Pacers tickets," he said. "All of that adds up. I'm already paying an awful lot to them."