With less than two weeks left in the legislative session, lawmakers are still at odds over spending extra money for Indiana roads—specifically whether to add more for just the next two years or raise taxes to provide stable, long-term funding.
A Senate committee on Thursday stripped higher cigarette and gas taxes from the House Republican road plan and merged what remained with its plans for short-term money for state and local highway accounts.
As amended, the bill would use money out of the state’s savings accounts for roads—assuming reserves at the end of the state fiscal year are more than 11.5 percent of current state spending. Currently, the reserves funds are at 12.5 percent.
The bill does not include Gov. Mike Pence’s plan to issue bonds to pay for additional road spending.
Senate Appropriations Chairman Luke Kenley, R-Noblesville, defended the changes.
“Over the past few years Indiana has poured more money into road funding, for the last seven or eight years, than almost any other state in the union on a per capita basis,” Kenley said. “Over $7 billion and none of it at really the expense of taxpayers beyond what they already paid. This year we are funding our maintenance program basically at a record level of $1.4 billion and next year it will be $1.3 billion those are very high numbers.”
Kenley said Indiana has done a good job on staying in front of the roads issue and has not let it become a crisis, but there are still two issues that need to be addressed.
“We do need to understand and deal with our local road and streets problems and we do need to improve our major arterial problem all across the state,” he said. “And secondly, we do need to develop a stable source of funding for our highway programs both state and local.”
Kenley wants to create a task force that would study a sustainable solution to fund road improvements. But some legislators want to determine where that money would come from before the legislative session ends.
“We need a long term solution for local road funding and we need it right now,” said Sen. Karen Tallian, D-Portage.
The original language in House Bill 1001 called for raising the gas and cigarette taxes as a stable source of road funding and cutting income taxes. The gas tax would be indexed to inflation, meaning it would increase over time. But Kenley said the increases might not be as helpful as hoped.
“A one-time indexing on the gas tax and a reliance on another dwindling resource, the cigarette tax—I just couldn’t get comfortable with that,” said Kenley. “And so I think we are just going to have to keep working on that until we can all come up with a solution.”
He said a task force has a better opportunity to find a sustainable solution—maybe without raising taxes.
“This task force—which is not another study group—this is a task force to get an answer and bring this back for next year’s budget,” said Kenley.
HB 1001’s author, Rep. Ed Soliday, R-Valparaiso, said he thinks the House can “build upon” the changes. He’s urging lawmakers to think about the gas tax as more of a user fee.
“I think we have a minor disagreement about whether the sales tax on gasoline is truly a user fee or whether that can be convoluted into other things,” said Soliday.
The bill passed unanimously and moves to the Senate floor for consideration.
Pence’s office issued a statement after the vote commending the Senate changes. “Gov. Pence is grateful to Sen. Kenley and the committee for their efforts to bring together elements of both the House and Senate infrastructure plans to continue to improve our roads and bridges,” said the statement, attributed to spokeswoman Kara Brooks.
House Speaker Brian Bosma, R-Indianapolis, said the changes are a good start toward a compromise but said the solution to the state’s infrastructure problem lies in finding a long-term answer.
“We still have a lot of work to do on our roads resolution both at the state and local level,” he said. “So those discussions are taking place and we are very hopeful that both parties will be able to come to a long-term solution not just a short one. That’s our goal not just to get through the next election but to help the next generation.”
Max Bomber is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.