Legislative Priorities and Agenda 2008-2009
INDIANA TRANSPORTATION ASSOCIATION
Legislative Priorities and Agenda as of 12/01/08
Preamble:
The Indiana Transportation Association is the primary association of public transportation providers and motorcoach operating companies serving all of Indiana. Members include Public Transportation Corporations (PTCs) formed under IC 36-9-4; Indiana’s only commuter rail district, the Northern Indiana Commuter Transportation District, (NICTD); Northwest Indiana’s Regional Bus Authority (RBA); the Central Indiana Regional Transportation Authority (CIRTA); public transportation operations formed as part of municipal or county government or are components of publicly supported human service agencies; members of the private sector that provide fixed route intercity, scheduled bus service or that conduct charter bus operations; and businesses that provide equipment and services that support the bus industry.
The ITA’s legislative mission is to emphasize to the Indiana’s decision makers and community leaders the importance of public transportation services as they relate to access to employment for many working Hoosiers (often the only means to make that connection); access to medical and quality of life services for many older Hoosiers and those with disabilities; and to the life impacting benefits of education to those attending our State’s schools, colleges, and universities. Further, the ITA takes seriously its responsibility to educate decision makers about the extensive environmental and congestion mitigation benefits of public transportation services and a balanced transportation policy. Finally, transit means business in Indiana. The state is a leading producer of buses, minibuses, and transit equipment, and is leading the way in the development of new hybrid technologies that have worldwide impact.
As an organization of dedicated, professional entities involved in the provision of vital transportation services, the ITA remains committed to the delivery of those services in a fashion that achieves maximum taxpayer value while upholding high quality standards for safety, security, and customer satisfaction.
Many initiatives of the Indiana General Assembly affect the provision of public transportation services by ITA member organizations, including funding that is provided through the Indiana Public Mass Transportation Fund (PMTF) administered by the Indiana Department of Transportation.
Positions and Issues
The following is a summary of the ITA’s positions and initiatives on a range of issues that may be discussed by the General Assembly.
Statewide Initiatives
• PMTF and CRSF Funding for Public Transportation
The ITA believes that the Public Mass Transportation Fund (PMTF), the Commuter Rail Service Fund (CRSF), and the Electric Rail Service Fund (ERSF) must remain dedicated funding programs. Currently, the PMTF is funded from a dedicated .67 of one percent and the CRSF is funded from .123 of one percent of sales and use taxes collected statewide. The ERSF is a special state fund generated from property tax on a railroad company’s distributable property that provides service with a commuter transportation district established under IC 8-5-15. The Northern Indiana Commuter Transportation District (NICTD) is currently the only commuter rail district eligible to receive the CRSF and the ERSF. In the future, if other communities develop commuter rail service, these funds must be increased so as to not dilute the existing funding for NICTD.
The ITA believes that the PMTF should be increased to adjust for the growth in the number of eligible agencies in the past several years and the costs associated with operating transportation services to an increasingly suburbanized state. In 1996, there were 32 transit systems in the PMTF formula. For FY 2009, INDOT included 61 systems in the formula, an increase of 29 operators. The ITA supports the existing performance based formula used to distribute the PMTF as a means of encouraging and rewarding the efficient provision of public transit service.
• Environmental Registration Fee
The ITA supports legislation that would require owners of passenger vehicles and trucks of 11,000 pounds or less to pay an environmental registration fee of $10.00 per vehicle in order to operate a motorized vehicle within the state of Indiana. The fee would be paid to the Bureau of Motor Vehicles (BMV) at the time of registration and the BMV would collect a service and handling fee of $.50 per $100.00 collected statewide. The fee would not be imposed on any vehicle that earns the designation of SafeWay Elite from the Environmental Protection Agency. The distribution of the remaining funds would be as follows:
20% would be added to the PMTF and distributed to eligible recipients as detailed in the existing performance based formula.
10% to “green” transportation initiatives, such as, but not limited to bike paths and trails for the first five years of revenue collection. In years five through ten, revenue would go to a revolving fund for perpetual funding of additional “green” initiatives. Investment income from this fund would be used to fund annual competitive grant applications for statewide “green” projects. We anticipate that application of the funds generated after the 10th year would be divided between the PMTF and the “green” revolving fund. Low emission vehicles for public transportation would be considered an eligible “green” transportation project.
20% to be split equally between each existing RTA or RBA, matched dollar-to-dollar with a local revenue source. There are currently two eligible authorities. As new RBAs or RTAs are created throughout the state, their share of this 20% will be determined by the State Budget Agency after review by the State Budget Committee and INDOT.
5% to rural transit systems as already administered by INDOT as a supplement to their PMTF funding.
5% to a newly created fund, administered by INDOT, to fund rural, intercity bus service.
2% to Metropolitan Planning Organizations (MPOs) and Regional Planning Councils (RPCs) on a competitive grant application process to assist in public transit planning such as feasibility studies for the creation of RTAs and RBAs. This program would also be funded by INDOT.
8% to a newly created fund to benefit senior citizens by providing free access to fixed route public transportation across Indiana. The program would be administered by INDOT subject to review by the State Budget Committee and approval of the State Budget Agency.
30% to a non-revertible transit fund for the sole use and purpose of financing new or expanded commuter rail services. These funds would require a dollar per dollar local match.
• Regional Transportation Authority Legislation
The ITA supports new legislation that limits new federal and state investments in highways and arterial roadways in suburban and exurban areas to counties that join in regional transportation authorities and commit adequate funds to leverage operating expenses of balanced transportation programs.
The ITA supports new legislation that allows expansion of Public Transportation Corporations to regional entities funded though expanded property tax district boundaries, the implementation of self-determined regional sales taxes, or other options. (See below for the Toolbox for Regional and Local Funding Initiatives.)
• Property Tax Relief Strategies
Indiana’s public transportation systems, especially its public transportation corporations (PTCs) rely heavily upon local property taxes to fund operating costs and the local share of federally funded capital projects. Aside from small allocations of local option income taxes, building and loan funds, and other revenues that are locally distributed to public agencies, about 90% of public transportation corporation local funding comes from property tax revenue. These PTCs have been allowed by the General Assembly no other significant means to raise local funds. There are also vast differences in the local tax rates of PTCs and there is no provision in current law to allow local communities to address these differences.
The ITA recognizes the motivation to lower and/or cap local property taxes as a percentage of assessed valuation. However, the ITA is very concerned about the potential impact of various proposals on the ability of local transit systems to raise the revenue they need to continue to provide a valuable service. HEA 1001, passed by the 2008 General Assembly, is causing a significant reduction in funding for Indiana’s PTCs. Other public transit operators will also be hit hard by property tax circuit breakers but the magnitude of the impact cannot be determined until after cities, towns, and counties decide how they are going to distribute the funding cuts among their many departments and services. The General Assembly provided no relief in the form of funding to replace the losses. Public transit operators have had no alternative but to cut service and raise fares at a time when communities are demanding for more service.
The ITA would therefore only support property tax limitation legislation if its member’s tax revenues were to be guaranteed or replaced by a stable and dedicated source of funding. The ITA believes that local communities should have the authority to determine their own level of local tax support for public transportation.
Toolbox for Regional and Local Funding Initiatives
The ITA supports the concept of the creation of a “toolbox of funding options” for local governmental units in creating funding sources for the support of public transportation. Local governments should have the discretion and legislative authority to create its own sources of funding for local and regional projects. No one solution is ideal or appropriate for every community so local communities need an array of options to evaluate so they can select the best option or options to meet their local needs. The following are options we would like to be considered and included in this “toolbox.”
• Annexation Rate Capture
The current Indiana Code providing municipalities the ability to annex unincorporated parcels does not provide for the protection or inclusion of Public Transportation Corporation (PTC) tax rates to be applicable to the newly annexed areas that often expect and require public transit services. Neither voluntary nor involuntary annexations provide for PTC tax rate capture. ITA supports and encourages legislation for both voluntary and involuntary annexations to preserve the PTC tax rate for public transit services. Tax rates for voluntary annexations can be negotiated similar to other services that may be negotiated by city administrations and tax rates for involuntary annexations can be preserved similar to the current system that requires an annexation fund to be established for excess tax revenues.
• Local Option Income Taxes and Local Option Gas Taxes
The ITA supports and encourages legislation that allows for local option income taxes and/or local option gas taxes for the express purpose of public transit funding. The General Assembly should pass enabling legislation that will allow the fiscal body of a city or a county to adopt by ordinance a local option income tax or local option gas tax for the express purpose of public transit funding.
• Transit Tax Increment Financing
Tax increment financing (TIF) has been a useful tool in the State of Indiana since the late 1980s. Recent legislative sessions have curtailed the ability to create and expand TIF districts. However, the ITA believes that in certain circumstances Transit TIFs may serve a useful purpose in two ways. For areas within the state wishing to provide new rail transit services a Transit TIF can solve two issues simultaneously that are normally consider opposing propositions. TIFs are sometimes accused of creating development sprawl by allowing development in “greenfield” locations at the expense of urban infill or redevelopment. A transit TIF along a rail corridor, especially one in a rural area, can offset future maintenance and existing bond costs if the development occurs along the established corridor. Also, a transit TIF along a rail corridor may delay or even stop urban sprawl because of the establishment of the TIF. Property taxes paid for the TIF obligations will mean less tax revenue for all other taxing entities within the TIF boundaries. It may even encourage higher density residential and higher value commercial construction within the TIF boundaries to offset the tax differentials between what the taxing entities require for operation of services to the development and the TIF dollars for transit purposes. In other words, a transit TIF may create circumstances that will encourage the type of developments needed or expected for rail transit services to be more economically feasible and affordable. Local zoning for transit oriented developments become a major component of Transit TIF Districts. The ITA supports legislation to actively pursue in the 2009 summer study session research and clarification of this potential component of funding.
• Transit Impact Fees
The ITA supports consideration of Transit Impact Fee legislation that requires upfront payments by developers of land within a transit service area to pay for transit services. Similar to the road improvement and park impact fee legislation, an analysis would be required prior to the establishment of a district. That analysis however cannot be based on the existing mass transit services being provided to determine the level of the impact fee since most often there is very limited or nonexistent mass transit in the area being proposed for the fee. However, if a county of local municipality wishes to supplement their transit operations with an impact fee, or create a transit service using this option to partial fund the services, the ITA supports legislation to research and study this potential option in the 2009 summer session.
• Special Assessment Transit Districts
This idea stems from the current statutes on conservancy districts within the state of Indiana. Any group of property owners (homeowners and/or businesses) can petition for the creation of a Special Assessment Transit District by a County Circuit Court. The Court can determine that the petition to create a SAT District is valid and order a referendum vote within the county of the petition for the boundaries established by the request to the court. Only property owners within the district boundary can vote to create the district (all property owners). Upon the results of the referendum, a SAT District is either created or defeated. Creation of the district would then require another local vote of only the parcel owners within the district boundaries to elect representatives for the purpose of establishing the fee and taxing rates to render public transit services within the boundaries of the SAT District. This idea qualifies as the suggested what to fund public services from the Kernan/Shepard report. The elected officials of the SAT District technically have been elected for the purpose of establishing fees and tax rates applicable to only the district area they represent. The ITA supports a summer study session on this form of funding.
Miscellaneous Issues
• Hybrid Propulsion Technology for Transit
Indiana is a center of development for new hybrid propulsion technology and alternative fuels such as soy diesel for the world’s transit buses. As the worldwide headquarters for two major manufacturers, Cummins Engine and Allison Transmission, Indiana benefits from investments in hybrid technology. The ITA supports the creation of a state sponsored matching grant program which would assist Indiana transit agencies with the incremental cost (currently about $200,000 per bus) of adding hybrid equipment to their fleets.
• Indiana’s Aging Population
Indiana’s senior population is increasing and by the year 2010, will make up a substantial percentage of the population of the state. Older Hoosiers who must, for safety reasons, give up their driving privileges is an increasing problem for many Hoosier families. The ITA supports legislation that encourages older Hoosiers to remain in their homes as they age by providing adequate funding for public transportation so the elderly will have access to transportation services.
• High Speed and Other Passenger Rail Service
The ITA believes that Indiana should move ahead with planning and development of its portion of Midwest corridors of high speed passenger rail service. Extending passenger rail connections to Indiana from Midwest population centers will have enormous quality of life and economic benefits to Hoosiers and enhance existing and planned services in non-automobile transportation.
• Coordinated Human Service Transportation and Medicaid Funding
The ITA supports efforts to coordinate human service transportation that complements services provided by ITA member public transit systems. The ITA encourages an active role in human service agency transportation coordination by its members, and supports the goals of the Federal Transit Administration’s “United We Ride” initiative.
The ITA supports common sense transportation voucher programs for the State’s Medicaid population, and supports a program that provides the least expensive, most reasonable option for transportation to medical appointments for Medicaid recipients. Toward that end, the ITA supports a “scheduled transit first” approach by caseworkers when assisting recipients, and pre-paid pass programs for medical appointments through local transit agencies.
• Transit-oriented Development
The ITA supports programs that encourage communities to consider public transit service when planning for business development, community planning, and all transportation improvements.
• Standards and Quality Assurance
The ITA promotes high standards for quality assurance among its members, and encourages member organizations to maintain standards consistent with those being developed by organizations such as the American Public Transportation Association.
• Regulation and Unfunded Mandates
The ITA understands the need for significant regulation in transportation services, but believes that new regulations should be tested for impacts before being enacted. Recent unfunded mandates regarding operator physical standards, non-scheduled transportation service, security, and reporting, promulgated by the federal government have added significantly to the cost of providing transportation service. The ITA encourages legislators to research impacts thoroughly before acting.
• Bus Drivers and Cell Phone Use
The ITA is supportive of and understands the reasoning behind recent legislation in other states that prohibits the use of personal cell phones by bus operators while driving. All ITA members have work rules prohibiting this activity. Exceptions of course should be
maintained for official communications made by radio or commercial cellular connection.
• Public Agency Tort Claim Limits
The ITA is concerned that recent increases in these limits will be costly to taxpayers through increased premiums. The combination of fewer Americans with traditional health insurance, aggressive plaintiff attorneys, and reduced investment revenue for insurance companies, has combined with the General Assembly’s actions to increase risk management costs for all Indiana transportation providers. The ITA encourages the General Assembly to resist those interests seeking further increases in limits.