Indy’s battered roads could see some improvement under a bill making its way through the Statehouse.
House Bill 1461, authored by Rep. Jim Pressel, a Republican from Rolling Prairie in northwest Indiana, could increase Indy’s share of road funding in at least a couple of different ways.
Raising taxes
The legislation would increase the amount of money that Indy can charge for its wheel tax — a fee applied to commercial vehicles like buses, RVs and large trucks — and vehicle excise tax, an annual fee that applies to passenger cars, motorcycles and light trucks.
Under current law, Indy residents can be charged up to $80 for the wheel tax, but the bill would raise that maximum to $240. It would also raise the vehicle excise tax limit from $50 to $150.
But increasing the limits would not necessarily bring the city more revenue, according to a fiscal analysis of the legislation.
That’s because Indianapolis already doesn’t charge the maximum for these taxes, and it’s unclear if Mayor Joe Hogsett would look to raise them.
Dan Parker, Hogsett’s chief of staff, declined to say whether the administration is considering the idea.
“We have not considered anything other than trying to get the bill passed,” Parker told Mirror Indy.
In the past, Hogsett has stated he won’t raise taxes unless the state changes its road funding formula, which disproportionately benefits rural areas.
For years, city officials have asked Republicans at the Statehouse to change the state’s road funding formula to be based on traffic volume, but Republicans, many of whom come from rural districts, have said that model isn’t right for Indiana.
The formula doesn’t take into account the number of lanes on a road. That means that a one-mile stretch of multi-lane thoroughfares like Washington Street and Keystone Avenue gets the same amount of money as a one-lane road in rural Indiana.
As a result, Indianapolis has 8,400 lane miles but only receives state funding for 3,400 of those miles.
As for the two taxes, Marion County annually collects about $14 million in county excise taxes and $1 million from the county wheel tax. If it charged the maximum, it could bring in as much as $67 million per year, according to the analysis.
Offering a matching grant
The bill also includes a provision for Indy to receive $50 million in funding from the state’s Community Crossings Matching Grant Program — so long as Indy matches the funds.
That would seem like a lot when considering the city received about $90 million in road funding from the state in fiscal year 2024, according to figures from the Indiana Department of Transportation.
However, the city commissioned a study using 2019 data which found that Indianapolis would need an additional $600 million per year to properly maintain its infrastructure — and that’s not including sidewalks.
The city allocated $200 million in the 2025 budget for investments in roads, bridges and greenways.
The bill also ensures that any unspent money in the Community Crossings grant program would be allocated to every Indiana county and city based on total lane mileage — a move that favors urban areas over rural ones.
Where the bill stands
The bill passed the House with bipartisan support but is still making its way through the Senate.
On March 25, the Senate Homeland Security and Transportation Committee made some slight tweaks to the bill before sending it to the Senate Appropriations Committee, which needs to sign off on the bill before it can be considered by the full Senate.
If it passes in the Senate, and the House signs off on the additional amendments, the bill would then head to Gov. Mike Braun’s desk for his signature.