Commuter tax plan in limbo but not dead

A proposed tax would send part of commuters’ tax dollars to governments where they work.

A commuter tax, which would tax any resident who travels into Marion County or another county for work, is up for discussion again through a proposal by the Indy Chamber.

Right now, no lawmaker is sponsoring the proposal to be considered in next year’s legislative session. And local lawmakers, including Sens. Brent Waltz, Greg Walker and Rodric Bray, say they will oppose the bill if it comes up for a vote.

“It’s a tax increase, and the people of Johnson County and the doughnut counties would have very little benefit from that,” said Waltz, R-Greenwood.

The Indy Chamber wants a commuter tax to help pay the costs of road and infrastructure maintenance and construction, which is currently paid from Marion County’s general fund. Every day 205,000 commuters — including 27,000 from Johnson County — go to Marion County and contribute to the wear and tear of those roads. Those commuters should pay money back to the community in which they work, said Mark Fisher, vice president of government relations and policy development for the Indy Chamber.

Establishing a commuter tax would not provide a solution for just Marion County, Fisher said, but the proposal opens up a discussion on how money should be divvied up throughout the state.

“Our current position is the creation of an incremental income tax of .25 percent that would stay in the county of residents and only impact individuals who work in a different county than their residence,” Fisher said.

And that’s on top of the income tax commuters already pay to the county they live in.

Fisher said the Indy Chamber has proposed the concept as a solution to help with local government funding but could consider other options.

Bray, R-Martinsville, said the proposal is not good public policy. Metro county residents who travel into Marion County for work already spend their tax dollars there by shopping, eating and buying gas, he said.

Local taxes that commuters pay, such as the food and beverage tax and sales tax, are not enough, Fisher said.

Waltz said commuters do contribute enough.

“They may not be getting enough in their eyes, but the amount that Johnson County contributes is just about right,” Waltz said.

Walker, R-Columbus, and Waltz said they both are willing to figure out a way to get more money dedicated to roads and other infrastructure that commuters use but do not support the commuter tax.

“I will oppose that with every fiber of my being,” Waltz said. “I think that is extremely poor public policy.”

Supporters of the commuter tax also have not figured out how to divide the tax if a resident works in more than one county. For example, if a lawyer represents clients in multiple counties, there is no way to cut up the commuter tax in the proposal, Waltz said.

“It would be almost impossible to implement that,” he said.

Before the idea would become a proposal at the Statehouse, a sponsor would need to be found. The Indy Chamber has discussed the proposal with State Rep. Michael Karickhoff, R-Kokomo, who has proposed a similar bill in the past. Karickhoff’s bill does not support a new tax but rather splitting the current income tax in a different way so that some of the income tax money goes to a resident’s location of employment.

About the tax

State lawmakers could consider a commuter tax. Here’s a look at the idea:

What: The Indy Chamber wants state lawmakers to consider a commuter tax, which would be an income tax increase for workers who live in one county and work in another.

How much: The tax would add a .25 percent incremental income tax for commuters.

Why: Supporters of the tax say the money is needed for maintenance and construction of roads and other infrastructure that commuters use but don’t pay for in local taxes.

Where it stands: No legislator has been named as a sponsor for the bill. Local lawmakers say they won’t support the tax.