Indiana's two state road plans vary a lot on funding

If a House Republican plan to hike gas taxes to pay for roads prevails, his rural Vermillion County would get a half-million dollars more next year to maintain 500 miles of local roads — many already turned back to gravel. If Senate Republicans' road-funding plan prevails — as appears increasingly likely — the county on Indiana's western border won’t get a nickel more.

“Our roads are in terrible shape, but we’re going to get nothing,” predicted Wilson, a county commissioner. “And why does that not surprise me?”

Communities around the state could see big, immediate differences in road dollars depending on which formula prevails in this final legislative week. The source of the money isn't the only question. Also at issue is how the money is divvied up.

By Thursday — the announced final day of the Legislature's 2016 session — lawmakers must strike a deal that has knotted them in debate for the past 10 weeks.

The House-backed plan pours an estimated $714 million into roads by raising gas taxes by 4 pennies and cigarette taxes by $1 per pack. Under that plan — favored by Wilson and many members of the Association of Indiana Counties — locals would see across-the-board increases of more than 22 percent in state road dollars for at least the next two years.

The money, which could be used for materials and equipment, such including asphalt and snow plows, would be divided based on the miles of roads in each community.

The better-odds Senate version, backed by Gov. Mike Pence, is a different kind of fix.

It puts $417 million into road repair and maintenance next year. But instead of tax increases, the money would come from an early release of local income tax receipts already collected by the state. Under that scenario, affluent, fast-growing communities that have collected the most local income taxes would get back the most money.

That’s why Vermillion County would get no money. A high-poverty rural county, it also has one of the lowest income-tax rates in the state, so it hasn’t collected enough to put in the state’s reserve.

Even communities that would get back money under both scenarios would see a big discrepancy.

One of the starkest examples is the affluent suburb of Carmel, with a population of 85,000 and the highest per-capita income in the state. It gets $15 million in road funding under the Senate plan. Meanwhile, the Senate plan sends half that much to Fort Wayne, the state's second-biggest city with three times the population.

In the House plan: Carmel would get just over $1 million in extra roads funds next year, while Fort Wayne would get more than $3 million more.

“You can have a lot of miles of roads and not get much money under the Senate plan,” said David Bortoff, head of the Association of Indiana Counties. “It’s not a plan based on need.”

For most local leaders, the House version seems a fairer and more long-term solution since the gas and cigarette tax hikes would be permanent. But it’s also facing tougher odds. Gov. Mike Pence, who’s up for re-election this year and who’s pledged not to raise taxes on his watch, strongly favors the Senate plan.

And Monday, during negotiations on the matter, Senate Appropriations Chairman Luke Kenley, R-Noblesville, repeated his oft-voiced criticism of a gas tax increase.

“Our caucus feels pretty strongly that you need to prove to the taxpayer that you’ve exhausted every other resource first,” he said.

The chief architect of the House plan, Rep. Ed Soliday, R-Valpraiso, seemed resigned at that meeting to temporary defeat. He’s frequently argued that Indiana falls about $1 billion short each year in needed road repair money, under the current highway funding scheme.

“Eventually, we have to deal with the issue,” he said.