Indigo presents $432.3 million budget, previews fare changes and Blue Line impacts

Indigo President and CEO Jennifer Pierce told the Municipal Corporations Committee on Sept. 17 that the agency’s proposed 2026 budget totals $432,300,000 and focuses on fiscal sustainability, frontline worker protection and increasing ridership.

Pierce said Indigo is using a 0-based budgeting process and has been running a fiscal-sustainability study to “take a look at every single part of our operation,” with an eye to stop spending on items that are no longer necessary and to identify new revenue sources. Chief Financial Officer Bart Brown told the committee the agency asked for $83,979,954 in operating (characters 1–3) in 2026, an increase of about $415,000 from 2025.

The budget includes a capital program heavily supported by federal grants. Brown said Indigo expects about $142,400,000 in capital grants, $20,500,000 in local cash (largely income tax) and $94,600,000 drawn from the $125,000,000 bond issue approved nearly two years earlier. He said federal and competitive grants now support more than half of Indigo’s capital program and that the agency has leveraged local dollars to attract “over half a billion federal dollars back to Indianapolis.”

Why it matters: Indigo’s capital spending funds construction of the Blue Line Bus Rapid Transit (BRT) across Washington Street and other corridor reconstruction projects that will change traffic patterns and require ongoing maintenance. Pierce told the committee the Blue Line reached 100% design, construction is underway and an opening is anticipated in fall 2028.

Key budget and service details - Total proposed budget: $432,300,000 (2026 proposed). - Operating (characters 1–3) request: $83,979,954. - Capital funding highlights: ~$142.4M in capital grants, $20.5M local cash, $94.6M from the previously-authorized $125M bond. - Projects: Blue Line BRT (Washington Street), local bus-stop and accessibility improvements, new garage funded by a grant, fleet upgrades including hybrid buses and security doors for operators.

Pierce and Brown also described revenue assumptions: passenger fare revenue was budgeted conservatively (about $5.9M in the operating projection cited by Brown) because experience from earlier BRT rollouts showed an initial dip in ridership during the first months of new service that later recovered. Brown said income tax and property tax are major local revenue sources and that Indigo directs about $20M “off the top” to pay debt service before allocating remaining local tax revenue to capital or operations.

Board actions and fares Pierce told the committee the Indigo board passed a fare increase in July. She said the agency will implement the increase in January and will upgrade fare-collection equipment mid-next year, moving platform validators onto BRT vehicles and adding new payment options (Google Pay, Apple Pay and tap-to-pay credit cards). Pierce said the changes are intended both to make payment easier for visitors and to reduce confusion on platforms.

Security, workforce and outreach Pierce and Brown described increased spending on security and paratransit service, and said Indigo has a workforce of about 840 employees (roughly half coach operators). About 75% of staff are represented by Amalgamated Transit Union Local 1070. Pierce highlighted workforce programs including an updated “Fair Chance” hiring policy (previously called Second Chance), an operator mentorship program and a recently completed mechanics apprenticeship that awarded state and federal credentials.

Councilor reactions and questions Councilor Jesse Brown and others pressed Indigo on the distributional impacts of the fare increase, asking how low-income riders who earn less than $25,000 annually will be affected. CFO Bart Brown said benefits were not being cut and explained changes to health plans and a younger workforce mix as reasons health-cost pressure had eased. Council members also asked about maintenance needs created by BRT operation; Indigo staff described preventive pavement maintenance and additional maintenance funding in the budget.

Discussion vs. decisions The committee heard Indigo’s presentation and asked questions; the committee did not vote on Indigo’s budget. The only formal board action mentioned during the presentation was the Indigo board’s July decision to raise fares; the council took no formal vote on that matter during the Sept. 17 hearing.

Ending Indigo officials urged residents to sign up for construction updates on the Blue Line project website and to watch outreach materials ahead of fare changes expected in January.