ANDERSON — With streets, county roads and interstates throughout Indiana in need of an influx of cash, lawmakers are considering five different proposals for funding.
The Indiana Association of County Commissioners estimates the funding gap at $1 billion annually just to maintain the existing road system.
An increase in cigarette and gasoline taxes could be on the horizon, measures supported by many Republicans, who hold a majority in both the Indiana House and Senate, but opposed by Gov. Mike Pence.
The House Republican plan was passed by the Transportation Committee this week that will increase the state’s cigarette tax by $1 per pack and increase the state’s gasoline tax from 18 cents to 22 cents per gallon.
The legislation would also divert 5 cents of the sales tax on gasoline to fund road projects with the loss in revenues to be recouped through the increase in the cigarette tax.
Democrats in the Indiana Senate have proposed a local option gasoline tax of 2 cents per gallon that could be used by the counties and reduces the state’s surplus by $250 million.
Several of the proposals are to return the Local Option Income Tax reserves held by the Indiana Department of Revenue to local units of government in the amount of $245 million.
“All the proposals are different,” Rep. Terri Austin, a Democrat from Anderson, said Friday. “I would like to see a hybrid of the proposals.”
Austin said she is not a fan of increasing the cigarette tax to supplement the general fund.
“The legislation will change substantially,” she said.
Austin is opposed to indexing the gasoline tax so it can be increased as the price of fuel fluctuates.
“Indexing the gas tax is a losing proposition over the long haul, the revenues continue to decrease,” she said. “Doing that we lose the authority and opportunity to control the cost to the consumers.
“Gas prices are low right now, but there is no guarantee that will continue,” Austin said.
She is opposed to a local option gasoline tax because half of the Indiana counties have not implemented a wheel tax, leaving $65 million on the table.
“I’m opposed to a local gasoline tax where there is already the wheel tax,” Austin said.
Madison County currently has a $25 per year wheel tax on cars and pickup trucks that generates approximately $2 million.
Austin does support returning the LOIT reserves to local units of government.
Sen. Tim Lanane, an Anderson Democrat representing the 25th District, agreed that there are a lot of options available to increase funding for road maintenance.
“It ranges from one-time to continuous funding,” he said. “Right now there is no consensus and I would be surprised if we reach a consensus.”
Rep. Melanie Wright, a Yorktown Democrat representing the 35th District, said a legislative priority has to be on improving the state’s roads.
“I prefer to find a fix that doesn’t raise taxes,” she said. “I want to make sure our first instinct is not to just raise taxes on consumers.”
Wright is hopeful that lawmakers can combine some of the plans and meet in the middle.
Both Austin and Wright said the state shouldn’t be considering additional travel lanes on the interstates at this time.
“The top priority should be maintaining what we already have,” Wright said of plans to add a third travel lane on Interstate 69 between Pendleton and Fishers.
Austin said the state is having a difficult time in maintaining the roads.
“It shouldn’t be a priority for lawmakers until we have the road funding resolved,” she said of an additional travel lane.
Austin said there have been studies done by the Indiana Department of Transportation about making the third lane limited access for high occupancy vehicles.
Lanane said lawmakers never considered a mass transit option for commuters into Indianapolis.
“If you’re not going to engage in mass transit, the only option is additional travel lanes.”