Indy faces $1B annual transportation infrastructure funding gap, report says

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The city of Indianapolis faces a $1.07 billion annual funding gap to improve and maintain its roads, bridges, sidewalks and other transportation infrastructure—an amount approaching the city’s $1.3 billion annual budget—according to a Department of Public Works report released Monday.

Much of the total comes from adding sidewalks to roads that lack them. But improving thoroughfare and residential pavement alone would take $520 million a year, several times what the city currently spends, according the report by Indianapolis-based engineering firm HNTB Corp.

“Ultimately, this transportation network was built because Indianapolis is the economic center of central Indiana, and our economic future is tied to our transportation network,” DPW Director Dan Parker told IBJ.

Officials say the report marks the first time the city has taken such a detailed look at the condition of its transportation infrastructure and the costs to fix it all.

“If you’re going to ask for additional help from whatever source, you’ve got to be able to say: What is your ask? What is your need?” Parker said. “… We had it based on estimates. This is now based completely on data.”

Indianapolis spent $179 million on capital transportation projects in 2021, according to DPW’s capital plan, as part of a multi-year infrastructure push under Mayor Joe Hogsett. But that total includes new bonds and other money based on policy decisions, plus competitive grant funds, not consistent funding. The base level of funding beginning in 2022 is just $25 million.

Keeping 2021’s base funding of about $55 million constant through 2025 would leave the city short $68 million annually simply to maintain its transportation infrastructure as-is, according to the report. At the base amount, the city’s infrastructure would be in worse in 2025 than it is now.

And because some assets, like pavement, are so degraded, they’re more expensive to fix. The report uses the Army Corp. of Engineer’s pavement condition index to evaluate the city’s road surfaces. Thoroughfares had an average of 59 (fair), while residential roads had an average of 51 (poor).

The report sets scoring goals of 65 and 63. Meeting those targets would take $132 million and $388 million per year, respectively.

The report estimates that even though the city owns just 30% of the lane miles that the Indiana Department of Transportation owns, it would cost 30% more to meet the same pavement condition goals. Part of that is starting conditions, according to the report, but also:

  • Scale: Smaller projects don’t achieve economies of scale;
  • Work: City noise ordinances prohibit nighttime construction;
  • Traffic: More expensive to establish work zones in urban areas;
  • Utilities: More common in urban areas, and expensive to relocate.

“There’s not enough money,” Parker said. “… I get this at every neighborhood meeting: I pay my taxes. Why can’t you do my street? It doesn’t matter what neighborhood. North, south, east, west, downtown—everywhere. The reality is that the dollars that go into this, there’s not a lot of property taxes. Not a lot of income taxes. The bulk of our dollars come from those gas taxes.”

Indiana’s road-funding formula allocates gas-tax funds and other revenue by center-lane miles instead of lane miles, favoring roads with fewer lanes. But many Indianapolis roads are multi-lane thoroughfares.

The city has 3,398 center-lane miles, but more than double the lane-miles, at 8,444, according to the report.

Parker said the city has spoken with state-level legislators about the issue, but not about changing the formula. Rural and non-Indianapolis legislators would need to vote for a change, shifting funding from their own districts to the capital.

“I’ve been around the Statehouse long enough to know that you don’t change formulas, because anytime you change a formula, there’s a winner and then there’s a loser,” Parker said. “But are there other ways that that help can come?”

Parker pointed at the INDOT’s Community Crossings grant program for local road projects. Indianapolis taxpayers currently pay about $22 million into the fund, but the city is only eligible for up to $1 million in projects, Parker said—but it’s still a funding source that was only recently added.

Meanwhile, DPW’s shifted to a long-term approach for maintenance.

It’s taken on the complete reconstruction of some streets with broken-down foundations, instead of making surface-level fixes, like the high-profile Delaware Street project downtown.

And the department is looking to lose more lane miles, via road diets: lopping lanes off underutilized roads and instead widening sidewalks and adding bike lanes. That leaves fewer vehicle lanes to maintain, Parker said, while the pedestrian and cyclist infrastructure will wear more slowly because of the reduced weight.

DPW’s first major road diet involves West Michigan Street, in a bike lane project that will go out to bid this year, according to Parker.

The next will be Madison Avenue, formerly U.S. 31. Parker said it was built for 50,000-plus cars per day, but is only getting 32,000. That project will turn the six-lane road into four lanes.

“From a yearly standpoint, sort of consistency standpoint, you’ll see the thoroughfares continue to be a priority,” Parker said. “But when extra money is made available, it really needs to be applied to that residential problem.”

Transportation infrastructure needs, according to the study:

  • Thoroughfare pavement:
    • $119 million yearly to maintain current condition
    • $132 million yearly to achieve target condition
  • Residential pavement:
    • $319 million yearly to maintain current condition
    • $388 million yearly to achieve target condition
  • Roadway bridges:
    • $64 million in work from 2020 through 2025
    • Expected to increase over next 20 years as large waves of 1960s bridges reach 75-year lifespan
  • Traffic signals:
    • $45.8 million total
  • Traffic signs:
    • $325,000 yearly
  • Sidewalks
    • $92 million total to repair poor-rated sidewalks
    • $7.2 billion total to build sidewalks along both sides of roads without them
  • Culverts
    • $350,000 yearly to maintain
    • $22 million total recommended in projects
  • Pedestrian bridges
    • $110,000 yearly to maintain
    • $2.3 million total recommended in projects

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32 thoughts on “Indy faces $1B annual transportation infrastructure funding gap, report says

  1. How much of that $1 billion gap can be attributed to the state’s lopsided road funding formula that results in small towns and rural counties getting more funding per capita than the largest city in the state? It’s time the GOP-dominated legislature fixes the formula so Indianapolis can fix its streets.

    1. As the article says, they never will. They like those city folk paying so they can have nice roads.

      The only thing worse than Indianapolis being a donor to the rest of the state is that the Indiana Legislature then prevents Indianapolis residents from raising their own taxes to fix the problem themselves.

    2. For the same reason that western states such as Utah and Wyoming receive more money back that they “pay into” federal road funding, because they are low density and themselves cannot support the road. However, we all benefit from that because you can’t have roads that end where there isn’t density. Of course, they connect to more dense cities/states. This is the same dynamic for local roads. What good is US40 in Putnam County doing for those of us here in Indy? At first you might say, not much, but now imagine not having that and the indirect impact that has on us all.

  2. I guess the construction project “formulas” really benefit the northside because they don’t have many potholes. They have a plethora of bike lanes as well. Hmmm.

  3. 7,2 BILLION to build sidewalks “along both sides of roads that don’t have them”??!!??
    Is Parker advocating sidewalks on 465? …
    There is no way that number is correct

    1. TBH that number sounds low. At $2.50/foot of sidewalk (extremely cheap), it would be nearly 10 billion to add/replace sidewalks on all 8100 lane miles of road in the city. If we’re talking nice sidewalks with the necessary grading and sewer/curb improvements needed, easily 10x that number.

    2. Wait. You’re saying that Indianapolis only has about 9 times as many residents as Carmel, but almost 17 times as many lane miles? That sounds like a lot of unproductive lane miles that merit higher density development where practical.

  4. In 2017, Indianapolis spent $16 million on resurfacing roads while Carmel spent $6 million. That’s $18.50 per capita spent in Indianapolis and $66.66 per capita in Carmel.

    1. Also pertinent (older article, but likely pretty accurate): Indianapolis has 8,100 miles of street lanes to cover, and city officials estimate it would cost $732 million to upgrade the road conditions to “fair.” Carmel has 486 lane miles that need to be maintained.

    2. My above comment was supposed to land down here. Anyway, Carmel having a population density twice as high as Indy? That seems to flip conventional thinking on urban vs suburban on its ear.

  5. A few things need amplification: 1. “Road diet.” This is nothing new of course, but consider the outcome of a road diet. Perhaps in some places it will be fine. But, I would suggest in many places it will lead to more congestion and/or greater travel times. Watch the city characterize this as “traffic dampening,” another phrase that sounds like it came out of a focus group to pacify the misled and underrepresented citizenry.

    2. The $1.07 billion is the ANNUAL funding gap. It bears repeating: A $1.07 BILLION ANNUAL ROAD FUNDING SHORTFALL. That’s right: we’ve underinvested in our roads by so much for so long that the ANNUAL shortfall is now approaching the size of the city’s entire budget. Bring back the stockades! -The Mayor needs to be clapped in irons and shamed for his negligence. Of course, it didn’t begin with him. Extradite Ballard from Florida and do the same (although I guess his utilities for roads deal deserves some penalty mitigation).

    1. You’re suggesting the Mayor should spend the entire annual city budget on road maintenance, or else be stockaded? That’s rather extremist.

      Seems more likely that the city doesn’t receive sufficient funding from the state, and the Statehouse has some feet that should be held to the flames.

      I suggest refusing to repair or pave the two blocks around the statehouse, and allowing it’s parking garage to crumble. Then we’ll see if the State has money for Indianapolis roads.

    2. The amount of money available and the taxes that can be implemented are both controlled by the state of Indiana.

      The reality is that our state legislators simply don’t care. They see no point in investing in the future of Indiana, they have no ideas other than “more tax cuts”. They see investing in good infrastructure as a waste of tax dollars.

      I like Charles’ solution.

    3. It’s not really fair to point fingers at a couple of individuals. This issue goes back all the way to Unigov, when the City of Indianapolis took on the financial burden of the low-density suburban townships. It worked for a while, but once the next round of sprawl development leapt into the outer counties and the high-income earners went there, it went sideways. Everything from State law, a lack of tax base sharing (outer county income earners coming to Indy and not paying into the public resources they use), the inability to have a local sales tax, the moratorium on sidewalks and street lamps, and low-density, outward sprawl has put us in this situation. We have way too much infrastructure for too few people. Urban3 did a financial analysis of Marion County and taxable land value. Center Township, especially Downtown, carries the rest of Marion County.

  6. It’s time to fix the roads correctly. Have you ever visited Alaska? Beautiful roads. Why? They use a concrete formula/mixture that uses ground up tire (recycled), which helps to prevent as much cracking and expanding with cold weather. Costs more to start, but seems it should be less expensive to maintain in the long run.

    Stop kicking the can down the road

    1. We all agree. It takes money we don’t have. We’d rather get a tax refund and spend the money getting our car fixed after it hits yet another pothole.

      Also, it would be easier for Indiana to be like Alaska if they had so much money coming in from the federal government and oil that they were able to give residents money EVERY YEAR. Hard to not fund roads right in that situation.

    2. I agree (rare though it may be) with Joe B. Comparing any of the contiguous states to the non-contiguous is a bad idea. Massive federal funding aside, isn’t 90% of Alaska basically uninhabited? While I’ll acknowledge that it’s huge, it has nothing approaching the crisscross of county roads that Indiana does. And though low in population, I’d still guesstimate that the state road miles per person (or however they measure this stuff) isn’t that great in Alaska. Not a lot of need for four-lane highways outside of a few cities. I haven’t been to Hawaii in awhile, and though it’s much denser, it also has great roads. A very agreeable climate probably helps.

      This by no means should undercut your suggestion regarding the concrete formula. It might be good in Indiana, but of course Indiana roads are subject to 6 months of frozen conditions, nor are they built on permafrost. Seems like a cool concept though.

  7. “I’ve been around the Statehouse long enough to know that you don’t change formulas, because anytime you change a formula, there’s a winner and then there’s a loser,” Parker said. “But are there other ways that that help can come?”

    What is it that they say? You can’t fail, if you don’t try. Seems a tad defeatist. Does the City have ideas for how these “other ways that help can come”, other than a few million more out of the Community Crossings grant? Or, are they just waiting and hoping for the state legislature to initiate it on their own?

    1. For this to have a chance at a statehouse in which Democrats aren’t even required to conduct business, it would have to be driven by Republicans who represent Marion County.

      Go down that list and try to remain optimistic. You think any of them would give Hogsett a win before his next campaign?

    2. Mayor Hogsett presented a regional funding plan a few years ago that’s gone nowhere at the Statehouse.

  8. To those who follow the Strong Towns movement, this is hardly a surprise. We are bankrupting our cities with the development patterns we have in place.
    The first thing Indy must do is put a moratorium on new roads and car lanes. No new roads. Period.
    Secondly, change zoning and create development that can actually support the infrastructure required to service it.
    Thirdly, fire anyone at the DPW and INDOT who actually believes this: “Ultimately, this transportation network was built because Indianapolis is the economic center of central Indiana, and our economic future is tied to our transportation network.” … Apparently the transportation network they built is bankrupting us, not enriching us.

    1. The cost of the Red Line included completely rebuilding streets like Meridian and College, exactly the type of work detailed in this article that needs to happen all over the city. Without the Red Line grant dollars, we’d all have to pay for those roads to be rebuilt. The same is true of the Purple Line (rebuilding 38th) and Blue Line (rebuilding Washington). You can fight the transit lines if you want, but you’ll end up paying for those roads elsewhere.

    2. “No one” (except for the 1 million+ riders who did each year during the pandemic and service cuts, on a line that is so productive that it accounts for 15-20% of total network ridership on just 1.6% of its route miles).

    3. I ride the Red Line all the time, as do many others. Your own lifestyle is not that of everyone else. This issue has been going on for a very long time and is financially far beyond “administrative costs” and transit investment. It shouldn’t be transit vs roads in a city of Indy’s size. Both should be excellent and as far as funding and service goes, neither are where they need to be.

    4. The Red Line was primarily paid for by federal public transit funding. And, it was built years after Indianapolis already had built up a multi-billion dollar infrastructure deficit. And, if you think the city spends billions of dollars on “top-heavy administrative costs” when the whole city budget is about a billion dollars, then I have a bridge to sell you in Brooklyn. Thanks for playing, Ed, collect your Rice-A-Roni parting gift as you head out the door.

    5. Federal grants aren’t fungible. You can’t take a federal transpiration project meant for a specific area, then use that money to repave Shadeland. You would just lose the grant and have no money.

      The income tax increase for transit is also not fungible. It is specifically for transit. You can’t transfer the tax elsewhere. You could lower it, or eliminate it, and that’s about it.

    1. The Red Line has nothing to do with this. Indy’s roads have been neglected and crumbling for many decades from lack of funding. Low property taxes and income taxes being siphoned out of Marion County by commuters are to blame.

  9. The one thing this article should have addressed is why roads that were repaved within the last 2-5 years are falling apart. While mill and fill is certainly cheaper in the short-run, the long-run costs are surely higher. Who is accountable and responsible for the lack of quality control? DPW and/or the contractor? How much extra are taxpayers paying for shoddy work?

  10. Spot on Robert G.
    Perhaps government really ought to finally consider running like a business.
    We are “getting what WE pay for” (taxes) at ALL levels of government by not paying attention at the ballot box.
    Ridiculous the schemes, formulas and grants required to operate “government” – career politicos… want a title, a fat paycheck and don’t know how to WORK.