A committee of the state Legislature met Thursday to hash out a way to pay for maintaining Indiana’s highways.
But Gov. Mike Pence had provided them with an answer two days earlier. Pence unveiled his 21st Century Crossroads plan that adds $1 billion to road spending over the next four years.
Pence’s plan works by magic — almost — and promises to find the extra $1 billion “without raising taxes.”
Suddenly, highway funding has become the Legislature’s top priority for 2016, in the words of House Speaker Brian Bosma, R-Indianapolis.
Roads came to the forefront this summer after a major bridge failure disrupted traffic on Interstate 65 in northwest Indiana. On top of the inconvenience, Pence’s political opponents have seized on the issue.
The governor bounced back with his painless plan for better roads. It draws on five sources of money:
• Pence says the state can afford to spend slightly more than $240 million from its $2 billion-plus reserves.
• Another $240 million will come from savings due to Indiana’s AAA credit rating and low interest rates, the governor says.
• Interest from the Major Moves fund created by leasing the Indiana Toll Road can kick in $50 million.
• Refinancing the state’s existing bonds to take advantage of today’s low interest rates can contribute $6.5 million.
• Finally — and this is the part that is not so magical — Pence is asking the Legislature to find $450 million, at the rate of $150 million per year in 2018, 2019 and 2020. It’s a long way off, but he doesn’t explain how lawmakers are going to come up with that cash.
So maybe the Legislature’s committee meeting Thursday was necessary, after all. Unfortunately, it did not seem to produce many ideas.
One notable suggestion came from a Democratic legislator, which means it probably will be ignored, although it was at least half-good.
Rep. Dan Forestal, D-Indianapolis, proposed raising Indiana’s cigarette tax by $1 per pack to pay for road improvements. That could be a win-win.
We’ve long suggested raising Indiana’s relatively low cigarette tax as a proven strategy to reduce smoking rates. Of course, if it works, the state could expect to get diminishing revenue from the cigarette tax.
Raising gasoline taxes may not be an option for lawmakers, even though low pump prices might keep Hoosiers from noticing.
Comparing Indiana’s gasoline tax to other states can get confusing. On its face, Indiana’s tax of 18 cents per gallon falls below the national average of 20.9 cents.
However, the American Petroleum Institute ranks Indiana’s gasoline taxes as the nation’s 11th-highest. That’s because it counts Indiana’s sales tax of 7 percent on fuel. Indiana seems to be one of only a handful of states that collect sales taxes on gasoline.
In their usual excuse, legislators say they can’t be expected to solve this problem in 2016, because it will be a “short” session of the Indiana General Assembly. It also happens to be an election year, when legislators are reluctant to raise taxes or make other unpopular decisions.
By 2017, legislators will need to find a way to keep Indiana’s highways as a major asset — a key to our geographic advantages as the “Crossroads of America.” Until then, they can be glad that Pence has bought them — and himself — a couple of years to come up with ideas.