BIC Matters: Senate Committee Passes Road Funding Bill

TO: BIC Grassroots Network
FROM: Vicki Kitchin, Executive Director
DATE: March 28, 2017

SUBJECT: Senate Committee Passes Road Funding Bill

This morning the Senate Tax and Fiscal Policy Committee, chaired by Senator Brandt Hershman (R-Buck Creek) significantly amended HB 1002 before passing it on a vote of 11-2. All Republicans in attendance voted in favor as did two Democrats (Senators Randolph and Tallian).

The official fiscal impact statement is not yet available. However, BIC’s preliminary analysis estimates the amended bill would result in about $670 million annually in new funds for Indiana road and bridge improvements. The amendment directs most of the new funds to INDOT with approximately $90 million per year going to locals through a grant program. Other than this local grant program, locals are held to 2017 levels plus inflation going forward. Senator Luke Kenley (R-Noblesville) said that the committee believes that this amount satisfactorily addresses the local need when factoring in locals’ ability to raise their own revenue.

The amended bill includes the following new revenue provisions:

  • Ten cent gas tax increase phased in over two years;
  • Six cent diesel tax increase phased in over two years;
  • Ten cent diesel surcharge increase phased in over two years and moved to pump;
  • New vehicle registration fee of $15 per year;
  • 50% increase in commercial vehicle registration fees and International Registration Plan registration fees;
  • New $5 per tire fee;
  • New $75 fee for hybrid vehicles;
  • Allows the Governor through Indiana Finance Authority and INDOT to pursue tolling.

Chairman Hershman and Senator Kenley noted that the sales tax on gasoline, which the House had moved to the highway accounts, will be considered as part of the Senate’s budget bill. That discussion will take place later this week in the Senate Appropriations Committee.

BOTTOM LINE: BIC applauds the Senate Tax and Fiscal Policy Committee for passing amended HB 1002. While the bill does not increase road funding as much as the House version did, and while it does not provide adequate funds for local roads and bridges, it does provide the opportunity for the Senate, House and Governor to reach agreement on a long-term road funding package. Those negotiations in these next four weeks of session will lead to further modifications of this bill.

If you have a member on the Senate Tax and Fiscal Policy Committee, please thank your Senator for moving the bill forward.

Next steps: HB 1002 could be eligible for further amendment on the Senate floor as soon as this Thursday, and a vote by the full Senate could come next week, although we can’t be certain it will move that fast. In fact, much will hinge on the Senate version of the budget (HB 1001) which the Appropriations Committee will consider this Thursday.

Stay tuned for more information and call if you have any questions.