Republican leaders in the Indiana Senate would like to give $418 million to local governments to help improve their roads—a proposal that comes after Gov. Mike Pence was criticized for leaving local road funding out his recent infrastructure plan.
Sen. Brandt Hershman, R-Lafayette, unveiled the proposal Thursday, which would be paid for with local income tax revenues currently held in reserve accounts by the state. The state banks the money to prevent cash-flow problems, but the balance has grown over the years.
Hershman's plan, which will be taken up when the Legislature meets in January, would return a significant chunk of that money through one-time payments to local governments, with dollar amounts determined by how much in income taxes their residents contributed.
Seventy-five percent of the money would have to go to road improvements, but local governments could spend the other 25 percent any way they like.
Hershman said his proposal, which has Pence's support, is "a reflection of our confidence in the system."
How to fund Indiana's poorly rated roads has emerged as a vexing issue for lawmakers. It became a political problem for Pence this summer after Democrats attacked him for an emergency closure of an Interstate 65 bridge near Lafayette that lasted for months.
In response, Pence proposed a $1 billion roads plan, which boosts short-term road spending by drawing down the state's budget reserve by $250 million while borrowing another $250 million. However, Pence's plan was criticized because it focused only on state highways and bridges, while leaving locals out.
So far proposals put forth by both Democrats and Republicans—including Hershman's—have failed to address the need for a sustainable and long-term way of paying for road repairs. Gas taxes are currently used to pay for infrastructure improvements, but motorists have increasingly switched to fuel-efficient cars, leading to a decline in tax revenue.
House Speaker Brian Bosma has said that finding a long-term solution is a priority for him, stating that "nothing is off the table."
Thursday's announcement comes after Pence has held a number of made-for-media events this week highlighting infrastructure projects around the state.
On Thursday he said in a statement that he will include Hershman's "initiative as part of my legislative agenda for the upcoming session."
While the plan does not address the long-term funding problem, Hershman said it could hardly be called a "Band-Aid."
"I think most localities would be hard pressed to spend this kind of money in a year," he said. "You're looking at a two- to three-year transportation program."