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BY BRENDAN O'SHAUGHNESSY Times Statehouse Bureau Chief | Friday, January 30, 2004 | (No comments posted.)
INDIANAPOLIS -- After several years of failed efforts, money for a mass transit system in Northwest Indiana took its first important step Thursday when a key tax panel approved the bill.
The Ways and Means Committee voted, 19-7, to approve money for the Regional Transportation Authority, moving House Bill 1282 to consideration by the full chamber. Supporters think the 1-cent food and beverage tax has a strong chance to succeed now that Northwest Indiana lawmakers agreed on how to split the approximately $6 million the tax should raise.
In a compromise forged this week, state Rep. John Aguilera altered the bill to direct $3.5 million to the authority to improve and expand transportation services throughout the region. Officials in Gary, East Chicago and Hammond had hoped to shed the costs for their city bus services, but the agreement requires them to continue current levels of property tax revenue dedicated for busing.
For the first two years, another $1 million annually would pay for a preliminary study of extending the South Shore passenger rail line to Lowell and Valparaiso. The authority received $2 million in federal matching funds several years ago but needed a local source in order to begin studying the expensive extension project. Starting in year three, the authority can use the $1 million for regional transportation.
The final $1 million would go to the Northern Indiana Commuter Transportation District, which operates the South Shore line between South Bend and the Illinois border, but any improvements and upkeep work would be confined to Lake County.
"It's a dramatic change from where he started," said Dennis Rittenmeyer, president of the authority. "We're pleased; it gives us more opportunities to fund and improve transportation in the region."
Aguilera said House leadership wanted to make sure the authority, unfunded since the Lake County Council authorized it in 2001, would improve bus service rather than replace the current systems in the three cities. He presented the authority as an economic development project worth a new tax.
"I'm cautiously optimistic" about its chances of final passage, said Iris Comer, an Interfaith Federation leader.
Russ Adams, owner of Strongbow Inn in Valparaiso, testified against the bill. A former chairman of the Restaurant and Hospitality Association of Indiana, he said taxing restaurants like his was unfair and would increase food prices.
"If it gets going, it won't stop in Lake County," Adams said. "I don't think a single industry should be responsible for collecting the entire tax."
The Northwest Indiana Quality of Life Council has said studies estimated 60 percent of the tax at restaurants and bars would be paid by people who live outside the county.
While supporters of a food and beverage tax said it would capture visitors' money for much of its revenue, John Livengood, a restaurant association lobbyist, said statistics prove otherwise. He calculated that a 0.1 percent increase in income tax, which the county can impose if it chooses, would raise more than the food and beverage tax.
State Sen. Earline Rogers, D-Gary, said she met with a key Senate Republican leader Thursday about supporting the bill. Republicans who control the chamber will not hold it up if the Northwest Indiana delegation agrees to it, he told her.
"Safe passage in effect is up to us," Rogers said.
Many lawmakers from outside the region said they supported the cause but had reservations about its funding mechanism, a 1-cent food and beverage tax expected to raise $6 million. They pointed out that Lake County has not taken advantage of other local income tax options as a majority of other counties have.
Brendan O'Shaughnessy can be reached at boshaughnessy@nwitimes.com or (317) 637-9078.
RTA at a glance
The Regional Transit Authority would use a 1-cent food and beverage tax at all restaurants in Lake County to improve the region's antiquated transportation system. Among the improvements would be a look toward extending the South Shore passenger rail line to Lowell and Valparaiso and a coordinated bus service.
The Northwest Indiana Quality of Life Council has said studies estimated 60 percent of the tax at restaurants and bars would be paid by people who live outside the county.
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