Indiana to study road funding alternatives

By Keith Goble, Land Line state legislative editor | 5/19/2014

A new law would help the state of Indiana address road funding needs.

Gov. Mike Pence signed into law a bill that requires the Indiana Department of Transportation to contract with a third party to come up with alternative funding to pay for maintaining state highways.

“We are trying to take a measured, comprehensive approach to considering what options or mechanisms are available to address the state’s infrastructure needs,” Rep. Ed Soliday, R-Valparaiso, said in a recent news release.

The signing of HB1104 comes at a time when state lawmakers have been unable to come up with funding sources as Indiana’s “Major Moves” initiative comes to an end. State officials have said that something must be done because money remaining from the $3.85 billion lease of the Indiana Toll Road in 2006 is mostly spent or due to be spent for specific projects.

As a result, Indiana must again rely on the state’s 18-cent-per-gallon fuel tax to get needed transportation work done. The tax rate hasn’t changed since 2003 – and doesn’t account for inflation.

The new law requires INDOT and the third party to spend up to two years studying alternative funding options.

Soliday said some of the alternatives that have been mentioned include a miles traveled tax, an additional fee for owners of electric and hybrid vehicles, tolls, and a state gross retail tax on motor fuels.

The miles traveled tax has received a lot of criticism for the cost of collecting the information.

“From studies I’ve seen, the costs of collection for that are about 16 times the cost of collection for the fuel tax,” Soliday stated.

At the conclusion of the study, the agency will then consider implementing a voluntary pilot program on one or more of the funding options.

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