Transit and the 2011 Indiana General Assembly: The Good, the Bad and the Ugly

Early in the 2011 session of the Indiana General Assembly, we were thrown a curve ball: the chair of the House Ways and Means Committee inserted a $10 million cut to the state Public Mass Transportation Fund in the biennial state budget bill. Central Indiana transit advocates had been focused on the future of transit, monitoring the potential of the legislature to enable local referenda on creating dedicated revenue to finance transit system improvements such as the plans laid out in Indy Connect. We didn’t expect any action concerning the present. The prevailing attitude about the current state of affairs is that policymakers can’t make it much worse in our state, whose transit systems lag far behind peer systems in other states, both in funding and level of service.

The Public Mass Transportation Fund (PMTF) is was a fixed source of sales tax revenue for all of the transit systems in the state – from rural demand-responsive programs to small city programs to IndyGo. A total of 66 transit agencies divide the .67% portion of Indiana’s sales tax allocated to the PMTF. The proposed cut in the House budget bill would have reduced the PMTF to .551% of the sales tax. The 17.8% cut would have impacted transit agency budgets to the point of service cuts and layoffs. IndyGo was facing a direct loss of $2 million. What’s more, transit agencies use their PMTF money to cover the local match required for receiving federal grants. Therefore, IndyGo would have lost up to $8 million more in federal funds – a severe blow to its budget of about $55 million per year. Take a look at IndyGo’s system map and imagine one out of five of those routes gone. Thousands would lose access to their jobs, medical appointments and other necessities. This is what a transit funding cut looks like.

After two months of anxiety and pleading, Indiana’s transit advocates breathed a sigh of relief when the final version of the biennial budget bill passed with 2012 transit funding levels intact (the good). 2013 funding was frozen at 2012 levels (the bad), which was disappointing, but less of crisis. Then, our relief took a nose dive when we learned about the ugly: that the 30-year-old guaranteed source of dedicated sales tax revenue known as the Public Mass Transportation Fund was eliminated. Instead, transit funding has been relegated to one of thousands of line items in the state’s general fund, which change from year to year. It will now be up to INDOT to decide every two years whether they want to allocate some part of its agency-wide allocation to public transportation.

The elimination of the PMTF funding mechanism will set the tone for General Assembly’s Joint Study Committee on Transportation and Infrastructure Assessment and Solutions, a newly enacted committee of legislators who will do the following during the interim periods between sessions(IC 2-5-28.5):

(1) Assess the condition of Indiana's transportation infrastructure in both the public and private sectors.
(2) In connection with the Indiana department of transportation and other interested parties, project Indiana's transportation demands through 2035.
(3) Determine whether Indiana's existing transportation infrastructure is capable of meeting the transportation demands projected under subdivision (2).
(4) Establish appropriate roles and responsibilities for:
   (A) the state and county and municipal governments; and
   (B) the private sector;
in meeting Indiana's projected transportation demands.
(5) Identify potential funding sources for both public and private transportation and infrastructure projects.
(6) Report its findings to the governor and, in an electronic format under IC 5-14-6, the general assembly.

This summer, transit advocates will be paying close attention to the activities of this committee. Will you join us? Interim Study Committee schedules and proceedings are announced at http://www.in.gov/legislative/index.htm (lower left side).