Mar 4, 2024 - News

Lawmakers carve out big political donor from downtown fee district

Illustration of the Indiana state capitol with lines radiating from it.

Illustration: Allie Carl/Axios

The Indiana Senate passed a bill last week that will allow Indianapolis to impose a new fee on downtown properties for public safety and beautification initiatives — but property owners represented by one of the most influential lobbying groups have been carved out of it.

Why it matters: The Indiana Apartment Association's political arm is one of the top donors to Statehouse Republicans, who are responsible for exempting apartments from the economic enhancement district's proposed fee.

  • The group lobbied hard to repeal the proposed district, which lawmakers gave the city power to create last year.

Catch up quick: In the final days of last year's legislative session, Republican lawmakers added to the state's massive budget bill the language allowing Indianapolis to create the district.

  • The Democratic-led City-County Council in December adopted a framework for the district, encompassing the Mile Square and generating approximately $5.5 million annually with a fee based on a property's assessed value.
  • Apartments were estimated to contribute nearly $2 million to that total.

Friction point: A month later, the Republican supermajority reversed course, coalescing behind a bill to repeal the district in the face of staunch opposition led by the apartment association.

  • Many downtown residents and businesses have said they support the district and the services it will provide, like increased public safety, cleanup and outreach for homeless residents.

What they did: House Republicans passed the repeal earlier this year, but the Senate revived the district after removing apartments from it.

  • "Primarily, it is to help keep those rental rates low," said Senate President Pro Tempore Rodric Bray (R-Martinsville).
  • House Speaker Todd Huston (R-Fishers) said his caucus would like to see a full repeal of the district but admitted that the Senate's version was "better than what is in current law."

Yes, but: Some Statehouse watchers have raised concerns that the House's about-face on the district they allowed to be created last year and the Senate's carve-out for apartments looks like a political gift to one of the Republican supermajority's biggest donors.

Follow the money: Since 2017, the Indiana Multi Family Housing Political Action Committee has spent more than $2 million to support, primarily, Republican lawmakers.

  • Last year, it was a top donor for Huston ($17,500), Bray ($20,000), the House Republican Campaign Committee ($60,000) and the Senate Majority Campaign Committee ($10,000).
  • It also gave smaller amounts, between $10,000 and $250, to many Statehouse Republicans, including each of the bill's authors and sponsors: Reps. Julie McGuire, Jeff Thompson, Ethan Manning and Mike Speedy and Sens. Scott Baldwin, Chris Garten and Mark Messmer.

The apartment association declined to comment for this story.

What they're saying: It's hard to prove that a person or group is buying favors, rather than donating to politicians whose policy positions already align with their own, said Marjorie Hershey, IU professor emeritus of political science.

  • But she said the treatment of donating money as part of free speech raises questions that contribute to growing distrust in our political systems.
  • "A lot of people would say that underlines some speech that has money associated with it and downplays speech that doesn't," she said.
  • Plus: Indiana's campaign finance regulations are "slim to none," Hershey said.

The other side: "There's lots of folks that decide to contribute or help be supportive of the Senate Majority Committee and our senators, because they think they're going to create good policy," Bray said. "Our policies have nothing to do with those donors."

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