Political group pushes alternative state infrastructure funding

Americans for Prosperity's Indiana chapter claims the majority of Hoosiers agree, despite House members' overall support of the bill.

The conservative-leaning nonprofit group held a town hall-style meeting in its Jeffersonville office Friday, with State Senators Jim Smith and Ron Grooms and State Rep. Steve Stemler speaking. About 15 people attended.

"When you ask someone, are you willing to pay a little bit more to improve our roads, what a lot of people will say after the first questions is, 'if we can guarantee that it all goes to roads, then yes,'" Justin Stevens, Indiana state director, said.

But that wouldn't be the case, at least as the bill exists today.

All of the revenue of the state gas excise tax is allocated for highways and roads, but only around 15 percent of what people pay in the gas sales tax goes toward infrastructure. Furthermore, Indiana is only one of 12 states that levies a gas sales tax at all, and only one of four that taxes the full amount. In Indiana, that's 7 percent.

The hikes would bump Indiana up to fifth place in the nation in the amount it taxes fuel, Stevens said.

"Knowing that ... would you still support an increase in the gasoline tax?" Stevens said. "The answer is typically, about 90 percent of the time, it's no.

"So we believe that Hoosiers across the state would like to see all of the taxes collected on gasoline to move exclusively to funding our roads prior to asking for a tax increase."

The other 85 percent of the revenue not allocated for roads and highways goes into the state's general fund. Stevens argues the general fund gap created by pulling that money can be filled with revenue growth project for the next two years.

Americans for Prosperity's plan would mean freezing increases in all other state spending, he added.

It also wouldn't bring new infrastructure funding up to the House's proposed $1.2 billion per year increase. Rather, it more closely meets what Stevens calls "needs" -- repairing roads and finishing current projects, but forgoing large expansions.

"The problem is, where do you cut elsewhere?" Grooms, R-Jeffersonville, said. "You want to cut education? You want to cut police? You want to cut health?"

It's a tough decision, Grooms alluded. The bill will likely change several times before it reaches the Senate in 4 to 6 weeks.

"My overall philosophy is take all the money you can from the taxes that's being generated and use that first," he said, adding that's where "most senators are probably going to start" when they begin examining the issue.

House Bill 1002 proposes a 10 cent increase, totaling 28 cents, per gallon in taxes on gasoline, along with several other provisions.

Smith, R-Charlestown, hesitated to take a stance during the town hall Friday.

"It's just really, really early in the process, so I'm officially neutral on the bill," he said.

Stemler, D-Jeffersonville, has already voted against the current version of the bill Wednesday when it passed through the Roads and Transportation Committee, of which he is a member.

There are some uncertainties concerning the state's coffers that Stemler said may shape infrastructure funding. More accurate revenue forecasts will be released soon, he said. Indiana leaders are also unsure how much federal funding the state will receive, amid talks of a $1 trillion national infrastructure plan.

Nevertheless, Stemler said applying the dedicated gas tax revenue collected to highways and roads "is supported by me — and critical."

One component of HB 1002 would direct the Indiana Finance Authority to study the feasibility and outcomes of tolling existing highways. In fact, the bill gives the governor the authority to toll interstates without any further approval from the legislature. In most cases, the federal government would still need to approve it first.

"It's going to be very difficult to find supporters of additional tolls after what our district is experiencing now, as well as the increase at the pump," Stemler said.

Grooms added he opposes tolling existing highways or roads, with the exception of the Kennedy Bridge, because its renovations were part of the larger Ohio River Bridges Project.

"I have to really, really have some strong arguments to use tolling as the only way to fund expansion of [Interstate] 65 and maintenance of it," he said.

Many of the people who attended the town hall aren't supportive of HB 1002.

"The way it is now, no," Jeffersonville resident Debbie Woolsey said. "Because we are already paying gas taxes that are not going to roads. We had a surplus a couple years ago — why wasn't it spent on roads?"

Getting people to support paying more at the pump may be especially difficult in urban areas, she said.

"I think Southern Indiana, we are especially sensitive because of Louisville — we already have higher gas prices," Woolsey said.

New Albany resident Ron Keller said he's in favor of freezing — as well as further cutting — the state's general fund.

"They collect this gas tax and then they have to take [85] percent of it and put it in a slush fund," Keller said.