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Strategy to Fund Regional InfrastructureLocal Income Tax Increment Allocation Concept
BOONEHAMILTON
MADISON
HANCOCK
SHELBYJOHNSONMORGAN
HENDRICKS
MARION
11,000 to Marion2,900 to Boone
55,000 to Marion15,000 to Hamilton
6,000 to Marion900 to Madison
15,000 to Marion2,900 to Hancock
4,000 to Marion900 to Shelby27,000 to Marion
7,000 to Johnson11,000 to Marion1,200 to Morgan
33,000 to Marion10,00 to Hendricks
2
REGIONAL COMMUTING PATTERNS
In total, 161,500 workers (23%) who work in Marion County every day commute from surrounding counties.
Wages taxed via the local income tax, are taxed by the county of residence.
Source: IT-40 data compiled by the Indiana Business Research Center
3
Distribution of Vehicle Miles Traveled among Central Indiana Counties (2016)
Includes Non-Interstate Freeway, Major Arterial, Minor Arterial Roads Vehicle miles traveled
(VMT) data is published by INDOT for all counties.
VMT is a proxy for the use of infrastructure and the costs required to sustain the transportation network.
Only non-interstate freeways, principal arterials and minor arterials (major thoroughfares) are included because of their role in intra-regional transportation.
VEHICLE MILES TRAVELED
2%
3%
4%
6%
6%
7%
7%
17%
48%
0% 25% 50%
Shelby
Boone
Hancock
Morgan
Madison
Hendricks
Johnson
Hamilton
Marion
Source: INDOT
4
INFRASTRUCTURE FUNDING
Annual Indianapolis Infrastructure Funding by Source
$
$100
$200
$300
$400
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Est 2020 Est 2021 Est 2022 Est 2023 Est
$ M
illio
ns
Taxes Special Income Tax Distribution Bonds Other Revenues Rebuild Indy TIF Target ($160 M)
Source: Indianapolis Office of Finance and Management
Includes revenues dedicated to:• DPW Transportation Improvement Program• Transportation Maintenance and Operations• Transportation Engineering
5
FOUR YEAR CAPITAL FUNDING PROJECTIONS
DPW Capital Program 2019 2020 2021 2022 2023 TOTAL
Funding Sources
LRS Construction Neighborhoods $ 5,000,000 $ 5,000,000 $ 5,000,000 $ 5,000,000 $ 5,000,000 $ 25,000,000
MVH Construction Neighborhoods $ 5,000,000 $ 5,000,000 $ 5,000,000 $ 5,000,000 $ 5,000,000 $ 25,000,000
New Funding | HB 1002 $ 10,000,000 $ 7,500,000 $ 4,250,000 $ 3,500,000 $ 3,500,000 $ 28,750,000
Gas Tax Funding $ 20,000,000 $ 17,500,000 $ 14,250,000 $ 13,500,000 $ 13,500,000 $ 78,750,000
City Cumulative - Transportation $ 560,000 $ 560,000 $ - $ - $ - $ 1,120,00
County Cum - Streets $ 4,240,000 $ 4,240,000 $ - $ - $ - $ 8,480,000
Parking Capital $ 3,700,000 $ 6,000,000 $ 4,000,000 $ 4,000,000 $ 4,000,000 $ 21,700,00
New Bonds ($120M ) $ 30,000,000 $ 50,000,000 $ 40,000,000 $ - $ - $ 120,000,000
New Funding | COIT Money $ 17,000,000 $ 5,000,000 $ 8,000,000 $ - $ - $ 30,000,000
BRT Money $ - $ 500,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 3,500,000
Other Local Funds $ 55,500,000 $ 66,300,000 $ 53,000,000 $ 5,000,000 $ 5,000,000 $ 184,800,000
Community Crossings Grant $ 1,933,359 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 5,933,359
Multi Modal $ - $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 4,000,000
LPA Federal Aid $ 17,326,658 $ 33,570,199 $ 21,986,897 $ 13,630,000 $ 19,070,659 $ 105,584,41
Indianapolis Neighborhood Infrastruture Program (INIP) $ 3,259,607 $ 4,000,000 $ 4,000,000 $ 4,000,000 $ - $ 15,259,60
Tax Increment Financing $ 12,200,000 $ 5,000,000 $ 9,240,000 $ 9,240,000 $ 9,240,000 $ 44,920,000
PPP/Grant/Donation $ 1,335,729 $ 40,000 $ 4,900,000 $ - $ - $ 6,275,729
External Funds $ 36,055,352 $ 44,610,199 $ 42,126,897 $ 28,870,000 $ 30,310,659 $ 181,973,107
Funding Sources Total 111,555,352$ 128,410,199$ 109,376,897$ 47,370,000$ 48,810,659$ 445,523,107$
2.3%
14.6%
2.0%4.9% 3.9% 3.0%
66.4%
1.3% 1.6%5.4%
27.0%
3.7%8.2% 7.5%
4.2%
39.4%
2.9% 1.5%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Boone Hamilton Hancock Hendricks Johnson Madison Marion Morgan Shelby
Wages Earned in the County
Income Taxes Collected by the County
6
CURRENT INCOME TAX DISTRIBUTION
Source:Wages: Woods and Poole estimate of wages earnedCollections: Indiana State Budget Agency; normalized to an equal tax rate
Approximately $130 million in taxes from Marion County wages are distributed outside the County
Comparison of Wages Earned vs. Income Taxes Collected in the 9-County Region
7
LOCAL INCOME TAX RATES
Local Income Tax Rates in Central Indiana Local income tax rates
range from 1.00% in Hamilton and Johnson Counties to 2.72% in Morgan County.
Marion County’s current income tax rate is 2.02%
In some counties, a portion of the income tax rate is dedicated to special uses, such as public transit, jails, or property tax relief [sometimes via bonding].
Each county in the 9-county region already imposes an “Expenditure Rate” for spendable income tax revenue of at least 1.00%.
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
Marion Morgan Shelby Boone Hendricks Hancock Madison Hamilton Johnson
Property Tax Relief
Special Purpose
Economic Development
Public Safety
Certified Shares - Spending
8
POLICY FACTORS
1. Transportation infrastructure is a critical component to the growth of a regional economy.
2. The cost burden of critical infrastructure is shared unevenly across the region.
3. Vehicle miles travelled (VMT) or alternative metrics demonstrate the usage of infrastructure assets between and among Central Indiana residents.
4. A basic policy premise is: the users of infrastructure assets should bear the costs in relation to their usage.
-
20
40
60
80
100
120
Regi
onal
Inco
me
Tax
Base
(Bill
ions
)
9
A “TIF-Like” Income Tax ConceptTheoretical Base Year 2019
FRAMEWORK
Historical RegionalTax Base Growth
“Base” Established in 2019
A portion of the “incremental” increase will be allocated to the
Regional Infrastructure Fund
-
20
40
60
80
100
120
Regi
onal
Inco
me
Tax
Base
(Bill
ions
)
10
FRAMEWORK
Historical Tax Base Growth
“Base” Established in first year
Portion Allocated to Regional
Infrastructure
Portion of increment
distributed in “normal” fashion to
Counties
Illustrative Incremental “Set Aside” – How much to Allocate?
93 101
87
69
51 57 61 66 70 75
80
109
118
102
81
60 67
72 77
83 88
94
-
50
100
150
200
250
2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031
Bond
ing
Capa
city
($M
Illio
ns)
Surrounding County Bond Proceeds
Marion County Bond Proceeds
11
CAPITAL FINANCING – MARION COUNTY SEPARATED
Approximate Annual Bonding Capacity – Bond Proceeds20 Year Term; 3.5% Rate (dollars in millions)
Potential annual bond proceeds
12
INFRASTRUCTURE FUNDING
Annual Indianapolis Transportation Funding –with Regional Infrastructure Proceeds
$
$100
$200
$300
$400
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019Est
2020Est
2021Est
2022Est
2023Est
2024Est
2025Est
2026Est
2027Est
2028Est
2029Est
2030Est
$ M
illio
ns
Infrastructure Spending Regional Funding Bond Proceeds Target ($160 M)
13
VMT BASED ALLOCATION
Funding Contribution from Income Tax vs. VMT Based Distribution
3%
18%
5%
6%
6%
7%
46%
6%
3%
7%
33%
4%
9%
9%
3%
32%
2%
1%
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
Boone
Hamilton
Hancock
Hendricks
Johnson
Madison
Marion
Morgan
Shelby
Distribution Contribution