Several bills attempting to address Indiana’s transportation infrastructure and regional economic development are headed toward eleventh hour conference committee deliberations where differences in approach between House Republicans and Gov. Pence/Senate Republicans will need to be hashed out. It is a high-stakes game in an election year.
House Bill 1001 is the House Republicans’ original effort to create a long-term, sustainable and dedicated funding source for Indiana’s roads, highways and bridges. It attempts to address a near $1 billion annual maintenance shortfall through indexing existing fuel taxes to inflation, dedicating the sales tax on fuel sales to infrastructure (vs. the state’s general fund), increasing taxes on cigarettes to refill the state’s general fund coffers (which support the state’s Medicaid program), imposing fees on alternative fuel vehicles, and supplying local units of government with expanded fiscal tools and taxing authority for roads. The Indiana Chamber worked with legislators on this bill and supports this comprehensive, data-driven approach.
Senate Bills 67 and 333 (as they started in the Senate) reflect Gov. Pence’s and Senate Republicans’ desire to avoid any tax increases for roads this year and delay any major decisions on road funding until the 2017 budget year, while also giving some money and tools to local units of government. At best, these proposals are short-term fixes to a long-term problem and the Chamber prefers the House Republican legislation.
Add to this mix Gov. Pence’s request for an additional $42 million for a third Regional Cities grant award, and you have plenty of fodder for lengthy, contentious negotiations with a March 10 deadline looming. Leadership from both chambers has been meeting with the Governor and his staff to hammer out a compromise proposal. As of this writing, negotiations are occurring behind closed doors and in caucus discussions with both sides remaining far apart. Meanwhile, Democrats in the Legislature watch as Republicans battle among themselves over the “right” compromise package.
We anticipate that the third Regional Cities grant will be funded in some way and that some short-term road funds and expanded authority for local governments will emerge. Whether or not the tax increases in HB 1001 survive the negotiation is an open question. The Chamber will work with all parties to address the state’s road-funding needs in the most rational and comprehensive way possible.