Road Plan Under Construction as Senate Takes Its Turn

The Indiana Chamber was pleased overall to see the Senate response to the House road funding bill. Several aspects of the plan will be determined as this bill goes forward – including how it interfaces with the budget bill’s (HB 1001) evolution.

Some key Senate changes from the House road funding plan are:

  • removal of the sales tax revenue collected on fuel sales that would directly go to roads
  • a Chamber-supported $75 annual registration fee for hybrid vehicle
  • modified distribution of the state/local road funds
  • requirement change from “may” to “shall” for INDOT to seek a waiver to toll interstate highways
  • addition of a $100 annual transportation infrastructure improvement fee that applies to commercial
  • vehicles greater than 26,000 lbs.
  • addition of a $5 fee per new tire sale (currently 25 cents per tire)
  • addition of a 10-cents per gallon aviation fuel excise tax with revenue going to the airport development grant fund

This version of the bill should bring in about $672 million per year. Tolling has the potential of bringing in up to $400 million per year, when implemented. Removing the House proposed sales tax revenue collected on fuel sales that were earmarked for the highway fund reduces the total by over $300 million. As the bill moves forward, the Senate may have other cashflows in mind that can be repurposed to replace that revenue stream. Doing so will help get the road funding bill close to the $1.2 billion a year the extensive Funding Indiana’s Roads for a Stronger, Safer Tomorrow taskforce recommended last year.

The Chamber testified in support of this version of the bill. It keeps the discussion going and presents other ideas and options to be considered for the final version of the bill, which we will work to bring to a good landing at the end of session.

The Chamber will continue to advocate for a strong, user-fee based model to address Indiana’s $1.2 billion per year road funding gap. We encourage members of the business community to contact your state senator to let them know they need to support HB 1002 to address the huge $1.2 million gap in Indiana’s road funding.

Call to Action: Connect with your state senator via our grassroots page. Let them know today that long-term road funding is important to you and your company!

Bumpy Road for Road Funding in Senate?

The Chamber recently testified in support of HB 1002, citing the need for long-term, sustainable funding to adequately maintain, finish what we have started to build and build out our priority new road projects. We also noted that we do not see where the state can magically find the funds in the present budget to address the need outside of taxes, plus the additional 10 cents a gallon to ensure our road quality is a wise investment.

There were no amendments offered as of yet but it is safe to say the bill will have several committee amendments to change it.

Additionally, there are several major issues to iron out in this bill. One is whether to dedicate all of the sales taxes collected on fuel sales to road funding or keep most of that revenue flowing into the general fund. Another is what the Senate will do with the $1 a pack cigarette tax increase passed by the House. The cigarette tax increase would have replaced much of the revenue in the general fund if the fuel sales tax would have gone to the road fund. Yet another issue is to toll or not to toll major interstate highways. While that is a pure user fee for roads, there is quite a disagreement about if and where such tolls should be considered.

Another aspect is there are legislators who don’t want to be labelled as “raising taxes” and shy away from the fiscal realities of our very important road infrastructure.

Folks, this is an investment in our future that won’t cost that much individually and has the potential to enhance commerce and Indiana’s “Crossroads of America” location advantage.

The Chamber will continue to advocate for a strong, user-fee based model to address Indiana’s $1.2 billion per year road funding gap.

Call to Action: Connect with your state senator via our grassroots page. Let them know today that long-term funding is important to you and your company!

Road Funding Bill Now Travels to Senate

Chamber-supported HB 1002 was amended last week on the House Floor and then passed 61-36 largely along party lines and is now up for consideration by the Senate.

The floor amendment prohibits any new toll road within 75 miles of any other toll road, terminates the gas tax indexing after July 2024 and allows additional time for public comment before a significant road project begins. Earlier, changes were made to the bill to have all sales taxes collected on fuel costs to be designated for roads (currently it’s only a penny of the seven-cent tax) starting in 2018 versus a phase-in of the sales tax to roads over three years through 2021. This creates a potential general fund budget deficit of over $300 million a year that must be addressed, either through budget cuts or other identified revenue sources. Moreover, the Chamber will continue to advocate for a strong, user-fee based model to address Indiana’s $1.2 billion per year road funding gap.

Call to Action: Connect with your state senator via our grassroots page. Let them know today that long-term funding is important to you and your company!

Get Your Motor Running for Transportation Funding

The long-awaited road funding bill (HB 1002, authored by Rep. Ed Soliday) arrived during the first week of session. It addresses the structural deficit of $1.2 billion per year for Indiana roads. The bill includes many good things that the Chamber supports; it is user-fee based and data-driven. While the bill will have changes during the next four months, we will work to support its basic concepts. The state’s situation: Over the years, technology (that led to better gas mileage) and inflation have combined to erode Indiana’s road maintenance dollars. Also, the last time the gas tax saw an increase was 2003. There will be a major hearing on this bill by the Roads and Transportation Committee on January 25 and the Chamber will be there to formally advocate its full support.

HB 1002 provides for a one-time fuel tax rate increase of 10 cents per gallon on gasoline  currently $0.18), special fuel tax (currently $0.16) and motor carrier surcharge tax (currently $0.11.) It also does the following:

  • Provides for an annual rate increase in fuel tax rates based on an annual index factor
  • Increases alternative fuel decal fees by 50%
  • Establishes a $15 transportation infrastructure improvement fee that applies to all motor vehicle registrations
  • Requires a person who registers an electric vehicle to pay a supplemental registration fee of $150 with an increase every five years based on an index factor
  • Provides that the gasoline use tax is distributed to highway funds over a phase-in period
  • Repeals restrictions on when a tolling project can be undertaken
  • Requires the Indiana Department of Transportation (INDOT) to seek a Federal Highway Administration waiver to toll interstate highways
  • Permits INDOT to approve certain railroad crossing projects and authorizes the Indiana Finance Authority to finance an approved project subject to a maximum annual debt service limit of $10 million
  • Makes various changes to the transportation funding exchange program between the state and counties and municipalities

Brinegar Speaks on School Choice and Charter School Legislation

The state Legislature passed two sweeping education reforms on Wednesday. Indiana Chamber President Kevin Brinegar comments on their significance:

School Choice Scholarships (HB 1003)
"For too long, thousands of Indiana children from low- and middle-income families have been trapped in assigned public schools that too often fail to provide the desired level of education. Now parents will be able to redirect a portion of state dollars assigned to their children’s education to a school that better fits their children’s needs. This will give those students a better chance for success in school and throughout their lives."

Charter Schools (HB 1002)
"We’ve seen some great charter school successes like Signature School in Evansville and the Challenge Foundation Academy in Indianapolis. By strengthening the charter school law to create more accountability for the authorization process and performance review, the number of quality options for parents and their children will increase. The law also permits under-used public school facilities to be utilized by charter schools, which is a win for taxpayers and prospective students."

Hammond Mayor Proclaims Charter School Support

Hammond Mayor Thomas McDermott Jr. authored a spot-on guest commentary on charter schools in the The Times of Northwest Indiana last week.

McDermott wrote about his three-year struggle to obtain a charter school in his community. He offered: "There is no reason that establishing charter schools in Indiana should take so long. Despite arguments to the contrary, charter schools do not undermine local public education. If anything, they serve to showcase how new educational methods and approaches can be applied successfully."

Read the column as McDermott puts his full support behind HB 1002, which would greatly expand charter school authorizing authority — among other initiatives.