An 11th-hour deal struck before the end of Indiana's yearly legislative session will give Gov. Mike Pence just a fraction of the $1 billion he proposed spending to make state highway improvements when he announced a four-year plan last fall to refurbish deficient roads and bridges.
Instead, after weeks of negotiation, the GOP-controlled Legislature approved a package of proposals Thursday that is more limited in scope and is expected to pump roughly $230 million in new money into state highways and bridges over the next two years while offering about twice that much for local roads..
"This doesn't take us long, long term. But it also doesn't just put money in the hole," said Rep. Matt Lehman R-Berne.
The agreement, which lawmakers approved before adjourning, draws down the state's $2 billion budget reserve and does not include an election-year increase in cigarette and gas taxes sought by House Republicans that was staunchly opposed by Pence and the GOP-controlled Senate.
The biggest winner under the plan appears to be local governments, which will get about $580 million for improvements to roads and byways in cities, towns and counties across the state.
But much of the money for local roads comes from local income tax collections held in state reserve accounts that many view as money that does not rightfully belong to the state.
"It's their own money," said GOP House Speaker Brian Bosma. "It's money that was collected from local income tax payers and it's being held in escrow by the state."
Paying for improvements to Indiana's roads is a major portion of the Republican governor's re-election campaign and was made a GOP priority during the legislative session.
Republicans have shown a sense of urgency to address the issue since Democrats attacked them after an Interstate 65 bridge near Lafayette closed for a month last summer. The need was underscored last month when concrete from an overpass in Terre Haute started crumbling onto Interstate 70, leading to a temporary shutdown for emergency repairs.
Senate Republicans and Pence, who faces a tough re-election battle with former Democratic House Speaker John Gregg, adamantly opposed raising statewide taxes to pay for long-term improvements to state's infrastructure, which officials have said ranks in the bottom third of states. Instead, lawmakers agreed to take up a possible tax hike during next year's session while granting local governments authority this year to impose or increase their own vehicle registration taxes to pay for improvements.
While Pence sought much more in funding for state roads, he did not walk away empty handed. Despite initial opposition from House Republicans, his request for an additional $42 million in funding for his Regional Cities economic development efforts was approved. That spares him from having to scale down the program after he already pledged $42 million apiece to the Evansville, South Bend and Fort Wayne areas for quality-of-life improvements.
Republican Indianapolis Sen. Scott Schneider said one reason he opposed the bill is because Pence went back on an agreement with lawmakers by pledging additional Regional Cities money and expanding the program.
He said he also had "heartburn" because "we are allowing local (governments) to raise taxes."
The deal also includes $10 million for a scholarship program pushed by Bosma, which aims to combat a teacher shortage by paying in-state college tuition for students who want to enter the profession.