Indiana’s light rail ban is a 2014 state law, codified at Indiana Code 8-25-4-9, that prohibits eligible central Indiana counties from purchasing, leasing, constructing, operating, or spending local public transportation revenue on a light rail project. It also bars those counties from directing anyone else to build or run light rail on their behalf.1Indiana General Assembly. Indiana Code 8-25-4-9 – Prohibition on Light Rail The practical result is that Indianapolis and surrounding counties can tax themselves for transit, but every dollar must go to something other than rail.
What the Statute Actually Says
The prohibition appears in Title 8, Article 25 of the Indiana Code, which governs Central Indiana Public Transportation Projects. The section is titled “Prohibition on Light Rail,” and its language is broad. An eligible county “may not” purchase, lease, construct, operate, or fund a light rail project from its county public transportation project fund, and it may not cause another party to do so either.1Indiana General Assembly. Indiana Code 8-25-4-9 – Prohibition on Light Rail
The placement matters. The ban binds counties operating under the central Indiana transit framework, not every government entity in the state. It is not a general order to INDOT. But for the counties it covers, including Marion County, the restriction reaches both construction and operation regardless of how a project might be structured.
How the 2014 Law Came Together
The ban was not a standalone measure. It was folded into Senate Bill 176, enacted as P.L.153-2014, Section 17, which was itself a transit expansion bill. The same legislation gave eligible central Indiana counties the ability to put public transportation funding to a local referendum. The bill’s digest described it as authorizing “the establishment or expansion of public transportation services other than light rail in an eligible county through a local public question.”
That framing captures the bargain. Legislators who backed the ban argued that light rail construction costs, often reaching into the hundreds of millions of dollars per mile, posed too much financial risk for Indiana counties, and that bus-based systems could deliver meaningful improvements for far less. Counties got a new revenue tool. Rail was taken off the menu as the condition.
What It Means for Indianapolis Transit
Marion County voters approved a transit referendum in 2016, authorizing the City-County Council to levy up to an additional 0.25 percent income tax to fund expanded public transportation. For someone earning $40,000 a year, that works out to roughly $100 annually. Because of the ban, none of that money can go toward rail. All of it has flowed into bus rapid transit and local route improvements.
IndyGo has used the referendum revenue alongside federal grants to build out a BRT network:
- The Red Line opened in 2019, running 13.1 miles with roughly 7.7 miles of dedicated bus lanes, 27 stations, and daytime headways of 10 to 15 minutes. Its total cost under the federal Small Starts grant agreement was $96.33 million. In 2024 it recorded 1,174,023 annual trips, a 7 percent increase over 2023.2Federal Transit Administration. Red Line Rapid Transit Indianapolis, Indiana
- The Purple Line extends 15.2 miles between Indianapolis and the City of Lawrence, with an estimated budget of $188 million and roughly half of that coming from a Federal Transit Administration Small Starts Capital Investment Grant. It operates in dedicated lanes for about 90 percent of its route, with vehicles arriving every 15 to 20 minutes at peak.3IndyGo. Purple Line Project Details
- The Blue Line, in earlier planning stages, will also use center-running dedicated lanes.
None of this is light rail, and under current law none of it can become light rail. The investment pattern reflects the statutory channel the 2014 law created: bus rapid transit built to high standards, with federal co-funding, running on dedicated lanes where possible.
Can a City or County Work Around the Ban?
Indiana’s home rule statute at IC 36-1-3-4 gives counties, cities, and towns broad authority, including “all other powers necessary or desirable in the conduct of its affairs” beyond those granted by specific statute. But home rule has limits. It cannot override an express statutory prohibition, and IC 36-1-3-8 withholds from local governments the power to impose taxes except as expressly granted by the legislature.4Justia. Indiana Code Title 36 Article 1 Chapter 3 – Home Rule
IC 8-25-4-9 is exactly the kind of express prohibition home rule cannot defeat. Even a county trying to fund rail through some mechanism outside its public transportation project fund would run into the statute’s broader language, which bars construction and operation regardless of funding source and bars the county from directing another party to carry out a rail project on its behalf.1Indiana General Assembly. Indiana Code 8-25-4-9 – Prohibition on Light Rail A municipality within an eligible county that tried to go it alone on a light rail project would likely face a legal challenge grounded in that language.
One boundary worth naming: the statute addresses light rail specifically. Bus rapid transit, commuter bus service, and local route expansion are the things it was written to permit, and those are what the referendum revenue has funded.
What Would Have to Change
Only the General Assembly can lift the ban. Unless and until it amends or repeals IC 8-25-4-9, eligible counties remain locked out of light rail regardless of local voter preferences, available federal funding, or changing transportation needs. Transit decisions for central Indiana’s largest population centers are, on this question, state decisions.
For readers trying to understand why Indianapolis is building bus rapid transit and not light rail, the answer is not that the city chose buses over trains on the merits. The choice was made in Indianapolis in 2014, at the Statehouse, as the price of letting counties fund transit at all.