Multiple plans to pay for Indiana roads, bridges advance

By Keith Goble, Land Line state legislative editor | 2/16/2016

Competing efforts at the Indiana statehouse to raise revenue for roads and bridges continue to move forward.

The push for more money to be applied to roads and bridges comes as 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 then-Gov. Mitch Daniels’ $3.85 billion lease of the Indiana Toll Road is mostly spent or due to be spent for specific projects.

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 Republican-led House has voted 61-36 to advance a $1 billion transportation funding bill. The effort 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 about 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, 70 and 80/94.

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

In addition, the bill redirects the sales tax on fuel over time to aid roads and bridges.

State law now allots the equivalent of one penny of the sales tax on fuel to the state highway account. The rest is routed to the state’s general fund.

Also included in the bill is a personal income tax rate reduction to be phased in over the next decade.

“This plan is a data-driven solution to repair and maintain our state’s roads and bridges without creating financial burdens for future generations,” Soliday said in prepared remarks.

House Speaker Brian Bosma, R-Indianapolis, added that the plan addresses immediate state and local funding needs while providing for long-term sustainability.

House Democrats were critical of the fuel tax increase. Instead, they wanted to use existing tax revenues to pump more than $2 billion into roads.

“Indiana House Democrats offered a plan that would use the sales tax we already pay at the pump to fund state and local road and bridge projects,” stated Rep. Dan Forestal, D-Indianapolis.

He claims the plan would have provided $2 billion in funding in the first four years.

Soliday’s bill now moves to the GOP-controlled Senate where lawmakers already approved by unanimous consent an alternative to the House bill.

SB333 would 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 backed by Gov. Mike Pence buys the state time to work out a deal for long-term transportation funding. The bill awaits consideration in the House Roads and Transportation Committee.

The Republican governor also supports a separate Senate-approved plan to return $430 million in one-time funding to local governments.

Specifically, about $171 million would go to counties, and $246 million would be made available to cities and towns. SB67 would require localities 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.

The bill is in the House Ways and Means Committee.

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

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