FORT WAYNE — Residents who understand the importance of logistics to Indiana’s economic growth are looking forward to the General Assembly improving the state’s road funding this spring.
Conexus Indiana and other business advocacy groups favoring infrastructure investment are presenting the strongest case they can to link Indiana’s future prosperity to support for House Bill 1002, which would provide the state with at least $1.2 billion annually in additional road funding during the next 20 years.
At the Indiana Logistics Council of Conexus, “we certainly believe there is a high probability of additional road funding being secured in this legislative session. But with all things political, it can change at any moment,” said member Andy Brooks, president of Fort Wayne-based Brooks Construction Co.
The bill is important because “northeast Indiana’s economy and Indiana’s economy are driven by manufacturing and agricultural business, all of which involve the movement of goods throughout the region, throughout the state, and then potentially overseas,” he said.
“Indiana is a large exporting state. To continue to support those key economic drivers, Indiana’s industries need to have a world class infrastructure system. And transportation is a piece of it.”
Indiana’s house passed HB 1002 as a long-term road funding plan because the state needs an additional $1.2 billion each year during the next 20 years to maintain and improve its roads and bridges, according to the website of House Speaker Brian Bosma, R-Indianapolis.
Republicans have a majority in Indiana’s House and Senate. The comprehensive road funding plan “would bolster Indiana’s reputation as the Crossroads of America,” he said.
The Indiana Department of Transportation has an annual budget of about $870 million, with about $670 million of that going to the maintenance of existing roads and the construction of new roads. The state’s 18 cents per gallon gas tax has not changed since 2003.
The U.S. Department of Transportation projects traffic on Indiana’s roads will increase by 45 percent by 2055. HB 1002 would raise INDOT’s annual funding to $2 billion to help prepare for that.
Of the additional annual funding, $400 million would come from a 10-cent increase in the state’s gasoline tax and $250 million would come from a 20-cent increase on diesel fuel. After the first year, automatic rate increases in the fuel tax would generate $20 million annually on average.
The automatic fuel tax increases would be based on an index, which takes into consideration Indiana personal income growth and changes at the national level in the urban consumer price index.
An additional $425 million would come each year by shifting 4.5 cents of the sales tax Indiana collects on a gallon of gas, from its general fund to the state highway fund.
A new $15 fee on all vehicles also would generate $90 million annually, and a $150 fee on electric vehicles registered in the state would bring an additional $5 million annually.
By allowing smaller communities, of at least 5,000, to impose a wheel tax would generate $10 million in additional funding each year. Currently, communities must have at least 10,000 residents to impose the tax.
The bill also would require INDOT to study tolling and submit a waiver to the federal government that would allow the state’s administration to approve tolling on Indiana interstates, which could provide the rest of the additional funding needed.
Some members of Indiana’s senate are resistant to raising funds through tolling and some are resistant to shifting gasoline sales tax money from the general fund into the state highway fund, said David Holt, Conexus vice president.
The part of HB 1002 most likely to change in the senate relates to the registration fees, which by comparison face broader resistance, he said.
But there is enough flexibility with the amount that could be raised through tolling to offset changes to that part of the bill, and to the provision in the bill related to the sales tax on gasoline, Holt said.
A Conexus survey of the highest priority new road construction projects in all 92 counties of the state showed INDOT actually needs an additional $1.4 billion annually to meet its road capacity and maintenance needs, so he said any give and take in the senate needs to arrive at a figure very close to at least $1.2 billion.
“Our major concern is they’d cut it down to $800 million or $900 million,” Holt said. “Our governor has said that we need at a minimum $1 billion per year.
“I think he’ll stay to that. And I think the house will push the senate to $1.2 million,” he said. “We really need to be at $1.1 billion or $1.2 billion per year.”
The General Assembly’s 2017 session is scheduled to end no later than April 29.