BIC Matters – House Committees Hear Senate’s Short-Term Road Funding Bills

Yesterday, the House Road and Transportation Committee heard SB 333, the Senate’s amended version of Governor Mike Pence’s short-term road funding proposal. Also, the House Ways and Means Committee heard SB 67, the Senate’s proposal to release excess local income tax trust funds back to the local entities that raised the funds with the majority of the funds now to be dedicated to road and bridge improvements. Road funding advocates used both hearings to express the need for longer-term solutions than either SB 333 or SB 67 provide. In addition, both hearings provided ample opportunity for House and Senate leaders, as well as the administration, to once again tee up their perspectives on road funding. Clear differences were expressed. Neither committee moved the bills yesterday. Legislative leaders are working behind the scenes to try and reach agreement on how to move forward with these concepts and those outlined in HB 1001, the House Republican long-term approach to the issue.

BIC is working with all of our road funding partners to impress upon legislators that the concepts outlined in HB 1001 are what’s needed as a big first step in building towards long-term solutions. Legislative leaders have said they intend to adjourn the session earlier than required by statute – on March 10. That means we have just three weeks to facilitate an agreement on these issues.

Action Requested: By end of day Monday, February 22, we ask that you CALL your SENATOR (here’s a contact list) and place a call to GOVERNOR PENCE’s office at 317-232-4567. In both cases, ask that they enact LONG-TERM, dedicated, stable and adequate road funding measures THIS YEAR. If you don’t speak with them directly, be sure to leave a message outlining your concerns. Your messages are important and will be counted.

Meanwhile, the following narrative will give you a flavor for how the two hearings unfolded yesterday.

House Roads and Transportation Committee Chairman Ed Soliday (R-Valparaiso) led the hearing on SB 333. Senator Carlin Yoder (R-Middlebury) introduced the bill by telling the committee that SB 333 had been passed unanimously by his committee and the full Senate. He said that legislators had not been derelict in addressing road funding, since $1.4 billion in new funds have been authorized for roads since the 2013 budget session.

Next, Micah Vincent, director of the Office of Management and Budget, described that Governor Pence’s road funding plan was based off of Scenario 1 from the Cambridge Systematics Study (found here). He said Cambridge found that INDOT needs the following additional amounts in each of the next four years to do adequate preservation and continue working on projects that have been started: $176 million in FY 2017; $208 million in FY 2018; $238 million in FY 2019; and $253 million in FY 2020. (Note: In subsequent testimony, BIC Representative Dennis Faulkenberg expounded on the Cambridge Study pointing out that Scenario 1 actually identifies an average annual need of $376 million for the next 18 years, and that does not include projects such as widening I-65 and I-70 or finishing I-69 with a bridge across the Ohio River, for example.) Mr. Vincent said that the governor’s proposal meets INDOT needs over the next four years. He said that even with the Senate change to remove bond financing, the governor believes the plan is adequate since state reserves are looking stronger than expected and the federal highway bill has been signed into law. (BIC Note: The Senate-passed version of SB 333 would result in the transfer of about $450 million in excess state general funds to INDOT in FY 2017. Future year transfers would require legislative approval.) He also said that the governor supports SB 67 that would provide one-time funding to local units.

Chris Kiefer, INDOT chief of staff, distributed a presentation from INDOT (CLICK HERE) showing how INDOT would spend funds assuming the governor’s plan passes. (NOTE: as you look at the INDOT slides, be sure to note that the slides assume the governor’s proposed additional funding of $1 billion over the next four years. BIC recently requested and was given this slide (CLICK HERE) showing the difference between what INDOT expects its construction program to be with and without additional funding. You will note that without additional funding, INDOT anticipates its construction program to be on average about $650 million over each of the next four years.)

Next, a long list of road funding advocates offered testimony in support of additional road funding. In all cases, testimony described that SB 333 is but one piece of a much larger package needed to fund state and local road and bridge needs for the future.

At the conclusion, Chairman Soliday held the bill and said that he and others are in regular negotiations on the matter.

Later in the afternoon, Chairman Tim Brown (R-Crawfordsville) led the Ways and Means Committee through a hearing on SB 67. Senator Brandt Hershman (R-Buck Creek), the bill author, said the bill was similar to HB 1110 except that it directs local units to spend the excess trust funds on infrastructure or place it in a rainy day fund.

Justin McAdam of the Office of Management and Budget testified that SB 67 has been endorsed by Governor Pence as a way to fund local road improvements in the short-term. Chairman Brown questioned Mr. McAdam asking what specific data the administration needs to make a decision about how to fund roads for the long-term. Mr. McAdam answered that no one is questioning the need for more funding, but the administration wants to take longer to consider how to raise revenue in the future.

Local road funding advocates, including BIC, testified in support of SB 67, but in all cases described it as being a short-term step that requires a longer-term solution as has been identified in HB 1001, already passed by the House of Representatives.

BIC Analysis of Yesterday’s Hearings

As we have described in previous issues of BIC Matters, this session has shaped up to be a battle between those who advocate long-term solutions and those who prefer short-term Band-Aids. The former is found in House Republican leaders Speaker Brian Bosma (R-Indianapolis), Chairman Brown, Chairman Soliday and many other House Republicans, who have shown tremendous leadership and courage by passing HB 1001 that includes long-term measures and takes a big step in creating lasting road funding solutions. On the other hand, Senate Republicans including Senate President Pro-Tempore David Long (R-Ft. Wayne), Appropriations Committee Chairman Luke Kenley (R-Noblesville) and Tax and Fiscal Policy Committee Chairman Hershman, along with Governor Pence, are acknowledging the “need” but showing great reluctance to do any more than find excess general funds and local trust funds to address the issue in the very short-term. They prefer to wait until after the 2016 elections to address the issue.

As stated above, only three weeks remain before the end of this year’s legislative session. BIC’s lobbying team is working an intensive effort, along with all of our road funding partners, to press for long-term solutions. We cannot predict what these next three weeks will bring.

But, we do know this. You are critical to this effort. Please take the time to act as requested above – and ask your employees to do the same. We need everyone acting on this request to ensure the greatest opportunity for success. Call or email BIC with any feedback you receive from your senator or the governor’s office. Thank you.