Indiana lawmakers move forward with plans to pay for state, local roads

By Keith Goble, Land Line state legislative editor | Monday, January 18, 2016

A plan endorsed by Indiana Gov. Mike Pence to pay for improvements to roads and bridges throughout the state has received initial approval at the statehouse.

Two Senate committees voted on Thursday, Jan. 14, to advance bills to raise $1.4 billion over the next four years for infrastructure upgrades.

A report commissioned by the state found that lawmakers need to approve about $1.5 billion annually to keep the state’s existing infrastructure in “good or fair” condition. The state now spends less than half that amount per year.

The Senate Homeland Security and Transportation Committee voted to endorse one bill, SB333, to reroute more than $240 million from the state’s reserve fund for transportation as long as the amount available at the end of the state fiscal year is more than 11.5 percent. The surplus state revenue now is earmarked for automatic taxpayer refunds.

Also included in the bill from Sen. Carlin Yoder, R-Middlebury, is $240 million in borrowing and $450 million in budget appropriations for roads and bridges through 2021.

Yoder said the bill buys the state time to work out a deal for long-term transportation funding.

According to the Republican governor’s office, the 21st Century Crossroads proposal would allow the state Department of Transportation to resurface 16,000 miles of state highways and repair about 5,000 bridges in the next 15 years without increasing taxes.

The governor said the additional funds will help INDOT make future maintenance and repairs as the interstate system “comes of age ... and will help ensure that our roads can support the economic and employment growth our state has seen over the last few years,” Pence said in recent remarks.

The plan, however, does not include any new revenue for local roads.

The second bill picks up where the first bill left off by distributing $430 million to local governments. Sponsored by Sen. Brandt Hershman, R-Buck Creek, SB67 would provide a one-time allotment to aid counties, cities and towns via a reserve balance from local income tax revenues.

Specifically, about $171 million would go to counties, and $246 million would be made available to cities and towns. Localities would be required to direct at least 75 percent of the funds toward local road and bridge needs or a rainy day fund. The remaining 25 percent could be used at the localities’ discretion.

Hershman said the bill would allow the state to make improvements to local roads, which local governments have identified as a top priority.

“This is money that will put concrete and pavement on the ground,” Hershman testified. “And it’s enough money. ... It represents two to three years of supplemental transportation funding that is not only helpful to the local community, but it provides a bridge as we continue the debate on a long-term solution for transportation funding.”

The Senate Tax and Fiscal Policy Committee voted unanimously on Thursday to advance the bill.

Meanwhile, House Republicans are calling for a long-term solution to transportation funding needs.

The House Roads and Transportation Committee could soon take up for consideration a bill that includes fuel tax increases and the possibility of tolls.

Sponsored by Rep. Ed Soliday, R-Valparaiso, the bill would raise the 18-cent-per-gallon gas tax and the 16-cent-per-gallon diesel tax by 4 cents and index the taxes to inflation.

HB1001 would also greenlight the state to seek a federal waiver to toll lanes on Interstates 65, 69 and 80/94.

Currently, the only toll road in the state is Interstate 80/90. Indiana also plans to charge users to the I-65 bridge over the Ohio River into Kentucky.

House Democrats have also released a proposal to raise $2 billion in the next four years by diverting sales tax collected on fuels to roads. Currently, the revenue is routed to the state’s general fund.

To view other legislative activities of interest for Indiana, click here.

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