OOIDA: Indiana roads plan will 'harm truckers'

By Keith Goble, Land Line state legislative editor | 4/4/2017

Tolls, higher fuel taxes and more truck fees are one step closer to passage at the Indiana statehouse.

The Senate Tax and Fiscal Policy Committee voted 11-2 to advance a bill that is touted to help the state address the $1.2 billion annually needed for roads over the next 20 years. Local roads need about $775 million per year.

The 102-page bill includes plans that the Owner-Operator Independent Drivers Association says will harm trucking businesses based in Indiana.

One component of the bill to raise about $670 million by the end of the second year would remove from statute a requirement for the General Assembly to approve the tolling of certain portions of interstates.

OOIDA has communicated to Indiana House and Senate lawmakers, as well as Gov. Eric Holcomb, the concerns of its 4,627 members residing in the state and of thousands more professional drivers who operate on Indiana highways each day.

Mike Matousek, OOIDA director of state legislative affairs, said the Association is “dumbfounded” by the provision to remove what little oversight the General Assembly has regarding toll roads.

“By repealing the legislative approval process, the legislature is effectively washing its hands of any oversight and accountability,” he said. “Instead, all major tolling decisions will be determined by the governor and unelected government officials. At best, this is bad public policy.”

He added that the state’s decision more than a decade ago to lease the Indiana Toll Road was a disaster.

“The authorizing legislation and lease agreement were seriously flawed, traffic projections were overstated, toll rates for trucks nearly tripled,” and the company running the toll road filed for bankruptcy three years ago, Matousek said. “We thought the state learned its lesson.”

HB1002 would also require the Indiana Department of Transportation to study tolling and submit a waiver to the Federal Highway Administration to allow tolling on existing interstates.

Sen. Brandt Hershman, R-Buck Creek, said the funding plan approved by his committee relies on all road users.

“Our plan will spread the responsibility of paying for roads among all drivers using our roads, including heavy trucks, which put significant wear and tear on our infrastructure,” Hershman stated.

Specifically, Hershman said it is likely that motorists would be responsible for paying up to 5 cents per mile and commercial vehicles would pay as much as 15 cents per mile.

OOIDA says tolling infrastructure that was constructed and maintained by tax dollars is fundamentally wrong.

Another concern highlighted by the Association is a proposed weigh-in-motion pilot program that would privatize certain aspects of commercial vehicle enforcement.

“The first-of-its-kind program will incentivize enforcement for profit, eliminate due process protections, and is a strong deterrent for law-abiding motor carriers to operate in Indiana,” Matousek said.

Also included in the lengthy bill is a plan to raise the state’s 18-cent-per-gallon gas tax by 10 cents. The 16-cent diesel rate would be increased by 6 cents. In addition, the state’s 11-cent surcharge tax on diesel would nearly double to 21 cents.

The House version called for an additional 4 cents per gallon to be collected from truck drivers.

All tax rates would also be indexed on an annual basis through 2024. Annual adjustments would be capped at one penny.

The diesel surtax would be collected at the pump instead of through quarterly tax filing reports. The change is expected to result in another $20 million annually from truck operations, according to a fiscal impact on the bill.

Rep. Mike Braun, R-Jasper, recently spoke in favor of the bill. He told lawmakers during House floor discussion that truck drivers will pay the biggest share.

“The typical owner-operator will pay $2,000 a year (in state fuel taxes),” said Braun, owner of Meyer Distributing and Meyer Logistics of Jasper, Ind.

The sales tax collected on diesel fuel purchases would be removed.

Hershman said the administrative “headaches” associated with collecting the tax outweigh the benefits of revenue collected.

“Because we are raising the excise tax and some other taxes we felt this was, in the interest of efficiency, a pretty good swap.”

Vehicle fees would be implemented for all classes. The revenue would be used to support local road projects.

In addition, a $150 annual fee would be added on all electric vehicles registered in the state. Owners of hybrid vehicles would pay $75.

A $5 tire fee would also be collected. The fee is estimated to raise $30 million per year.

Matousek said the state should not get too excited about the revenue projection.

“Truckers are simply going to buy tires elsewhere, and we suspect this provision will hurt Indiana-based businesses that sell tires.”

Another revenue enhancer would come via a $100 commercial license plate fee. It is estimated to raise $39 million annually.

The Association says the fee based on weight essentially amounts to a tax on a tax.

The bill’s next stop is the Senate floor where a vote could come at any moment. If approved, HB1002 would head to a conference committee made up of select members of the House and Senate. The group of lawmakers would be responsible for hashing over their differences before the bill heads to the governor’s desk.

Gov. Eric Holcomb said last week the higher fuel tax rates, and tire and vehicle fees, would be enough to get needed road work done. He added that within the next decade the state would need to take a “hard look” at tolls.

OOIDA encourages Indiana truck drivers to communicate any concerns about provisions in the bill to their state lawmakers.

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

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