Nation's Newest Transit Funding Income Tax Approved in Indianapolis

[Updated March 1, 2017] "The Marion County transit system is getting its first major expansion," reports James Briggs.

The City-County Council on Monday approved a 0.25 percent income tax hike that will pump more than $54 million a year into the county's meager bus service. The money will pay for the construction of three bus rapid transit lines, new buses, increased route frequency and new sidewalks and bus shelters.

The transit tax was closely watched by transit advocates around the country, as well as locals, for its unique method of raising revenue and its approval process. Planetizen readers will recall that Marion County voters overwhelmingly supported the income tax for transit, by approving Question 2 in the November 2016 election. The Indianapolis City-County Council delayed action on the results of that vote until yesterday. According to Briggs, the tax took years to approve, moving through layers of bureaucracy at the state and county levels, before finally gaining the approval of the Indianapolis City-County Council.

Now that the whole process is said and done, the income tax hike will take effect in October, explains Briggs, "costing Marion County residents about $100 per $40,000 of income."

[An earlier version of this article incorrectly described the Indianapolis transit tax as the first of its kind. Cincinnati has a 0.3 percent earnings tax that funds transit.]