BIC Matters – Senate Reveals its Highway Funding Plan

Yesterday, the Senate Appropriations Committee, chaired by Senator Luke Kenley (R-Noblesville), amended HB 1001 as follows:

  • Removed language that would have increased the amount of sales tax on fuel purchases dedicated to the highway accounts;
  • Removed the increase in the state gas and diesel tax that would have restored purchasing power to 2002;
  • Removed language that would have required INDOT to study the feasibility of tolling I-65, I-70 and I-80/94 and to seek a waiver from the Federal Highway Administration for tolling;
  • Limits to only one year the allocation of excess state reserves over 11.5% to the highway accounts (the House version did not limit this to one year);
  • Allows municipalities with a population of at least 10,000 (original bill had been 20,000) to enact a surtax/wheel tax;
  • Allows locals to use Motor Vehicle Highway (MVH) and Local Road and Street (LRS) accounts for the same uses, but changes current law to disallow using the funds on sprinkling, snow removal, weed and tree cutting, cleaning of highways, painting, the operation and maintenance of traffic signs and signals, safety zones and devices and law enforcement purposes;
  • Allows locals to use surtax/wheel tax funds for the purposes now disallowed from MVH and LRS (see previous point);
  • Adds a $50 registration fee for hybrid vehicles (in addition to the $100 fee already in the bill for electric vehicles);
  • Creates a Funding Indiana’s Roads for a Stronger, Safer Tomorrow (FIRSST) task force comprised of thirteen individuals including legislative leaders, administration officials, and gubernatorial appointees after considering recommendations from counties, cities and towns and Build Indiana Council. The task force is to present a plan and recommendations to the budget committee before January 1, 2017 for consideration in developing the state biennial budget beginning in FY 2017. The plan must include evaluation of the following:  whether major projects will require additional funding, if P3 and tolling mechanisms are viable for projects, can annual maintenance needs be funded, should the state incur debt for new projects, is the state system of road taxes and fees equitable for transportation system users, whether the concepts of indexing or changing fuel tax rates are appropriate, whether identified projects are the appropriate priorities, should the state sales tax be dedicated to roads and could collective purchasing agreements reduce costs of state and local governments;
  • Appropriates funds to Purdue to study local road funding issues and assist locals in developing transportation asset and pavement management systems.

HB 1001 is now eligible for further amendment and passage by the Senate.

What does the Senate Appropriations Committee action mean to our overall road funding effort this session? The fact that the Committee amended HB 1001 is no surprise. The fact that they eliminated the long-term road funding provisions is also not a surprise, but is certainly disappointing. However, on a positive note, the Senate Appropriations Committee kept HB 1001 alive. Remember, Senate leaders have indicated throughout this session that they do not want to increase taxes in this election year. They could have held the bill and killed the proposal completely. The Senate action sets the stage for the House and Senate (and the Governor) to begin negotiations. 

We need you to contact your Senator now.  Legislative leaders intend to adjourn this session by March 10. Within this upcoming two-week period, it is critical that you contact your Senator and ask him or her to support LONG-TERM road funding solutions THIS YEAR. We need MORE members to contact Senate offices. Please contact your senator and let BIC know of any reaction you receive. Thanks to those of you who have acted on our previous calls to action. Your phone calls really do make a difference.

Status of SB 67 and HB 1110

These two bills are still alive. Since passed by the respective house of origin, the other house has now amended each to reflect its original version. You may recall that these bills release local option incomes taxes from a trust fund back to the locals that imposed the taxes. The Senate directs the majority of the funds to infrastructure improvements while the House does not restrict the funds’ use. BIC, working with our local road funding partners, supports the effort that would provide locals another source of funds to improve roads and bridges.

If you have any questions about this issue of BIC Matters, please call us at (317) 634-4774.