BIC Matters – Indiana House Approves Long-Term Road Funding Bill

Yesterday, on a vote of 61-36 the Indiana House of Representatives passed HB 1001, the bill that would create long-term, dedicated road funding for Indiana road and bridge improvements. In remarks on the House floor, the bill author Chairman Ed Soliday (R-Valparaiso) explained that the bill is the result of five years of detailed research by the House Roads and Transportation Committee. He noted that the bill would:

  • Dedicate state reserves over 11.5 percent to highway accounts.
  • Direct 5 of 7 cents of the sales tax collected on fuel sales to highway accounts (these funds currently are directed to the state general fund).
  • Add a $1 tax to a pack of cigarettes to fund smokers’ healthcare costs currently paid from the state’s general fund.
  • End the automatic tax cut Hoosiers get every year due to the gas and diesel tax being a fixed per gallon tax that loses buying power each year. Accomplishes this by adding an index to the per gallon gas and diesel tax.
  • Create a matching grant fund that local units could access if they provide a 1:1 match and use an approved asset management plan for their roads and bridges.
  • Allow local units to use local option income taxes for road and bridge improvements.
  • Give cities over 20,000 population the ability to implement their own wheel tax.
  • Double the maximum wheel tax/surtax rates for counties.
  • Implement a $100 per vehicle sticker tax for electric vehicles.
  • Provide Purdue’s LTAP Center a $250,000 grant for the purpose of analyzing data from local unit asset management plans.
  • Further cut the personal income tax rate to 3.06 percent from the current rate of 3.3 percent by 2025.

Chairman Soliday emphasized that these measures would allow state and local government to do the necessary maintenance and preservation required for roads and bridges. He said that even with this proposal the legislature would need to come back next year and determine how to fund major projects that are started but not finished and how to fund projects needed for the future.

Legislative Services Agency has estimated that HB 1001 would result in the following additional road funding:

  • FY 17 (INDOT): $759 million
  • FY 17 (locals): $230 million
  • FY 18 and beyond (INDOT): ≈$240 million + excess reserves*
  • FY 18 and beyond (locals): ≈$215 million + excess reserves* + funding from local tools

*Additional funding could also come from future indexing.

Several other House members spoke in favor of the bill’s passage including Chairman Tim Brown (R-Crawfordsville), Rep. Randy Frye (R-Greensburg), Rep. Mike Braun (R-Jasper), Rep. Timothy Harman (R-Bremen), Rep. Gregory Steuerwald (R-Danville), Rep. Jeff Thompson (R- Lizton) and Rep. Matthew Lehman (R-Berne).

All Indiana House Democrats voted against the bill and several of them spoke out asking for the bill to be defeated. Eight Republicans voted against the bill. Click here for a complete list of how legislators voted.

#1 ACTION REQUIRED: We need to thank House members who voted YES on HB 1001. They acted with courage and showed long-term vision by passing this bill. Go to the vote sheet HERE, and send your legislator a thank you note via email if he or she voted “YES.” You may also call your legislators or meet with them over the weekend. It is very important that legislators hear support from their constituents.

On the other hand, if your legislator voted NO, send him or her an email respectfully expressing your disappointment and asking them to reconsider their position when the bill comes back at the end of session.

NEXT STEPS: HB 1001 is now eligible for consideration by the Senate. The Senate sponsors of the bill are Senators Luke Kenley (R-Noblesville), Brandt Hershman (R-Buck Creek), Karen Tallian (D-Portage) and Jim Arnold (LaPorte).

We are unclear how the Senate will choose to handle HB 1001. Thus far, Senate leaders have expressed a preference to delay discussions on long-term solutions until next year.

#2 ACTION REQUIRED: Contact your member of the Senate. Click HERE for the list. Express to your senator the importance of acting on the opportunity that is at hand. We need long-term solutions enacted this year. Ask your legislator to speak up in caucus meetings about the importance of passing HB 1001 this year. Ask your senator to support HB 1001.

If you get feedback from your senator, please provide the information to BIC. We have a very short time to get action in the Senate. The first week of March is the deadline for bills to pass out of the second house. Please use this time to reach out to your senators and express the importance of acting now.

In other news, the Senate passed SB 333 today on a vote of 49-0. This bill began as Governor Mike Pence’s proposal to provide a short-term boost in road funding to INDOT. The bill uses bonding, excess state reserves, accelerated interest distributions from the Next Generation Trust Fund, bond refinancing and future budget distributions to provide $1 billion to INDOT over the next four years.

While BIC supports this effort, we recognize it is a short-term solution and does not provide funding to locals. We have also expressed our concern to the Senate and the administration about the lack of a new revenue source to fund the bonds. The Senate Appropriations Committee did amend the bill by delaying the state’s ability to issue bonds until after the 2017 legislative session.

Overall this week has been a great interim success for BIC and our road funding partners. We extend our sincere thanks and appreciation to Chairman Soliday and House Republican leaders for their courageous proposal and long-term vision. Also, thanks to each of you who have reached out to legislators. We need you to continue doing so as we work on HB 1001 in the Senate. The second part of this legislative session brings with it a whole new set of challenges. We need all BIC members to make grassroots contacts with legislators back home while our lobbying team works the day-to-day effort at the Statehouse. Keep up the good work.

If you have any questions about this issue of BIC Matters contact Vicki Kitchin at (317) 634-4774.