Lawmakers consider repealing Indy's downtown fee
Add Axios as your preferred source to
see more of our stories on Google.
Photo: Joe Sohm/Visions of America/Universal Images Group via Getty Images
Some state lawmakers want to reverse course on a policy they passed eight months ago that allowed Indianapolis to impose a new service fee on downtown property owners.
Why it matters: Downtown has struggled to rebound from the pandemic amid the rise of remote work. The estimated $5.5 million the fee would generate annually would help fund a new low-barrier homeless shelter and downtown improvements.
- Increased public safety and beautification efforts within Mile Square have recently been funded with federal pandemic relief dollars, which will run out this year.
Driving the news: The House Ways and Means Committee took nearly four hours of testimony Wednesday night for and against House Bill 1199, which would repeal the city's newly created Economic Enhancement District — and the fee that funds it — but did not vote on the measure.
Catch up fast: Last year's budget bill included language allowing the city to create the economic enhancement district in Mile Square.
- That budget deal also included $20 million to build the shelter that the district's fee will help maintain.
- The Indianapolis City-County Council voted to create the district last month, but HB 1199 would abolish it.
Between the lines: Several Republican lawmakers yesterday took issue with the way the language had been inserted into the May budget at the last minute.
- Yes, but: At the time, Rep. Jeff Thompson (R-Lizton), top budget writer in the House, said there had been ongoing discussions about the language, but declined to say where it came from.
What they're saying: "The number one constituent concern in 2023, and still today, is the rising cost of property taxes," said Rep. Julie McGuire (R-Indianapolis), who is leading the proposal to repeal the fee.
- She said it would exacerbate the problem.
How it works: While the change is set to appear on 2025 property tax bills, city officials said it's not technically a tax.
- Residential properties will be charged $250 annually.
- All others — including apartments, hotels, office buildings and parking areas — will pay about .17% of their assessed value.
Flashback: The city considered a similar measure in 2018 but met stiff opposition from some downtown property owners, particularly the Indiana Apartment Association.
Yes, and: The association has once again emerged as fierce opposition.
- Brian Spaulding, representing the group, told lawmakers the new district treats renters unfairly.
- He said the rollout of the plan lacked transparency and questioned why the city didn't pursue an economic improvement district, which requires signatures of impacted property owners.
The intrigue: Downtown apartment owners aren't a monolith.
- The owner of the Whit apartment building is looking at rental increases of more than $1,200 annually to cover the new fee and increasing property taxes.
- But several others, including the Ardmore, came out to support the district and said the services are worth the cost.
The other side: "Our members feel a sense of urgency to create some solutions to the challenges that they see downtown," Taylor Hughes, vice president of policy and strategy for the Indy Chamber, told lawmakers during the committee hearing.
- Hughes said they were open to conversations with lawmakers about how to improve the fee structure but "leaving session without an alternative would be a very unfortunate outcome."
What's next: Thompson, who chairs the Ways and Means Committee, said he'd hold the bill for amendments but wouldn't have next Wednesday's meeting agenda confirmed until Monday, so it's unclear when the bill will resurface.
The bottom line: The fight over the district will continue.
- It pits Indianapolis and some of its highest-profile employers — including Salesforce, Cummins, AES Indiana and the Indiana Sports Corp., who testified against the bill and in support of the district — against a Republican supermajority seemingly intent on having a hand in Indianapolis.