City considers non-resident tax to drive new revenues

Indianapolis faces another tough budget year as it ponders how to pay for everything from public safety to parks and street repairs.

Some say one solution is just down the road and across the county line. They say a commuter tax could drive in tens of millions of dollars.

The mayor's office and Indy Chamber are likely to ask state lawmakers for a non-resident tax in the upcoming session, but the move is sure to face roadblocks.

Janie White and Missy Emmert both work in downtown Indianapolis, but they live in other counties. Neither likes the idea of having to pay a commuter or non-resident tax.

"We do spend a fair amount of money down here. We eat lunch, typically, out almost every day; we park downtown," said Emmert

"I don't think it's fair to penalize those who work down here," said White.

Indy Chamber president Michael Huber said, "It's a difficult issue, we don't like to talk about new taxes. We're an organization of businesses," but he also said in this case, a non-resident tax is one the chamber fully supports and has since 2006.

"It's all about keeping the core city strong, being able to have enough revenues to maintain our downtown and our schools and parks," said Huber.

Huber notes Indiana is one of the only states where people pay all their local income taxes to the county where they live rather than work. He said the number of non-resident workers in Marion County is roughly 200,000 while the number of reverse commuters is about 50,000.

"The population of Indianapolis swells about 150,000 every day and Indianapolis and the other big cities in Indiana don't have any means to pay for the additional public safety resources or infrastructure," said Huber.

Based on the license plate tags on the cars parked at Shapiro's Deli on South Meridian, it draws a lot of people from outside Marion County.

Hamilton County resident Bob Grogan was one of the "non-residents," enjoying lunch at Shapiro's Tuesday afternoon. He said he knows about non-resident taxes through his sister-in-law.

"They paid a tax at the company she worked for to Chicago, because she was outside Cook County," Grogan said.

While he's not entirely opposed to a commuter tax, he said, "What the taxes are used for is what I'm concerned about.'

The same for Diane Mediate, whose son is an IMPD officer.

"They need more police, they're so shorthanded, they need more money," she said.

But getting any new tax passed won't be easy.

"The best solution would be no new tax but a reallocation of existing income taxes, but that's not going to happen," Huber said.

He said many counties have budgets and capital projects "going out 10, 20 and 30 years."

White, too, doesn't like the idea of taking tax revenue from one county and redistributing it to another.

"My county needs their money, too," she said. "Marion County is larger, but Johnson County is struggling as much as Marion."

Huber said there were also risks in letting counties adopt a new non-resident tax.

"You could see companies threatening to or jumping county lines, which is not good for anyone," he said. "We think the only way it works is if there's a regional solution that multiple counties opt into."

He added the non-resident tax wasn't just a Marion County issue, but one that had implications for other large cities, including Evansville, South Bend and Fort Wayne.