BIC Matters: Indiana Legislature Passes Long-Term, Dedicated, Stable Highway Funding Package

TO: BIC Grassroots Network
FROM: Vicki Kitchin
DATE: April 22, 2017

BIC Matters: Indiana Legislature Passes Long-Term, Dedicated, Stable Highway Funding Package

The Indiana state legislature has passed HB 1002, the highway funding package that will provide long-term, dedicated and stable increased funding for state and local highways, roads, streets and bridges. The House voted 69-29 in favor; the Senate voted 37-12 in favor; and both votes had bipartisan support. The bill now goes to Governor Holcomb for his signature; he has publicly indicated his support for the package.

HB 1002 will result in additional funding of $617 million in FY 2018 growing each year to an additional $1.209 billion in FY 2024. Specifically, it includes the following:

  • Raises gas, diesel and motor carrier surcharge taxes by 10 cents each beginning in FY18 and indexes the taxes annually for seven years with a one cent per year cap
  • Gradually shifts the sales tax on gas to the state highway fund by 2025 (but allows the Governor to hold back these funds for general fund purposes subject to review by the state budget committee)
  • Increases the International Registration Plan and BMV registration fees by 25% for trucks greater than 26,000 lbs.
  • Implements a $15 statewide transportation infrastructure fee for all vehicles less than 26,000 lbs.
  • Implements an annual electric vehicle fee of $150 and a hybrid fee of $50
  • Eliminates the sales tax on special fuel
  • Requires INDOT to study tolling and to apply for a federal tolling waiver; requires state budget committee review before INDOT could implement tolling
  • Requires INDOT to develop metrics and prioritize projects using a data-driven model
  • Moves the motor carrier surcharge tax to the pump and applies to all diesel buyers
  • Continues the community crossing matching grant program for locals and modifies the match requirements as follows: counties over 50,000 population and cities/towns over 10,000 population will be at a 50/50 match; counties under 50,000 population and cities/towns under 10,000 population will be at a 75/25 match
  • Allows INDOT to operate a federal funds exchange program with locals
  • Extends local wheel tax/surtax adoption deadlines
  • Restricts local uses of MVH funds to exclude paying for police and painting structures and requires that 50% of MVH funds be used for construction, reconstruction and maintenance
  • Phases in changes to the MVH split from current 53% state/47% local to 60% state and 40% local beginning in FY18 and ending in FY23
  • Allows the IFA to facilitate the completion of a P3 project in a situation where the P3 agreement has been terminated or the IFA has exercised its right to seek remedies

Our state legislators deserve our praise and thanks for taking this courageous vote to improve our state’s highways and bridges and ensure that Indiana reaches the next level for the future.

Chairman Ed Soliday has worked to achieve this measure for at least six years. He has mandated an approach and solution that is unequivocally data-driven. House Speaker Brian Bosma and Chairman Tim Brown have led the House Republican caucus in pressing for solutions, understanding the significance of this issue and advocating for this vote.

In the Senate, Chairman Luke Kenley has worked hard to figure out a financing plan that invests in our highway system while ensuring general fund stability. President Pro Tempore David Long, Chairman Mike Crider and Chairman Brandt Hershman worked with their caucus members to ensure this issue is addressed for the long-term.

BIC would like to thank our broad coalition of partner organizations who have worked closely together for many years to convince legislators of the need for additional investment. These partners include local governments, agriculture, state and local chambers, organized labor and many others.

Also, BIC would like to thank our member associations: ACEC-IN, ACPA-IN, APAI, ICI, IED, IMAA and IRMCA for continued support and perseverance. Our members (all of you, the members of these associations) have been the core of our grassroots network and have responded to our calls to action. Your contacts have made all the difference in this effort.

Finally, we owe great thanks to our professional highway funding experts and lobbying team: Dennis Faulkenberg and Laurie Maudlin of APPIAN Advisors and Bill Livvix of BRL Associates. This achievement is a direct result of their expertise and tenacity and wouldn’t have been possible without them.

Thanks to all.

BIC MATTERS: Action Required

Contact Your Indiana State Representative Before January 25

“Despite our standing and our ongoing momentum, we can’t afford to get complacent or take our eyes off the ball.” – Governor Eric Holcomb, during his inaugural address on taking Indiana to the next level.
“I need every one of your members to be involved!” – Speaker Brian Bosma, during remarks at an industry lunch earlier today.

BIC NOTE: As highway funding advocates, we must heed the advice from Governor Holcomb and Speaker Bosma. The stars are aligning as never before, but we cannot take the outcome for granted. As we begin this legislative session, we ask you to take action when the need arises. We seek long-term, dedicated, stable and adequate funding for Indiana’s state and local highways, roads, streets and bridges. Your contacts to legislators during the next four months will be critical to our industry’s success. Please watch for BIC MATTERS alerts and take action. We will only ask for action when we truly believe it’s warranted. And now for this week’s update…

In the last two weeks, leaders in both the Indiana House and Senate and Indiana’s newly elected Governor, Eric Holcomb, have announced long-term road funding as a top priority for the 2017 legislative session.

Indiana House Republican Leadership Announces Road Funding Plan (HB 1002)
Republican leaders in the Indiana House of Representatives have introduced a comprehensive and bold road funding bill (HB 1002) that would provide new annual road funding of at least $1.2 billion per year. HB 1002 includes new revenue as follows:

  • increases the gasoline tax, special fuels tax and motor carrier surcharge tax each by 10 cents to restore lost buying power since the taxes were last raised,
  • indexes all fuel tax rates annually using a formula that incorporates CPI-U and Indiana personal income growth,
  • transfers, over three years, the remaining 4.5 pennies of the sales tax on gasoline from the General Fund to the State Highway Fund,
  • implements a $15 annual statewide infrastructure improvement fee on all vehicles registered in Indiana,
    implements a $150 annual statewide infrastructure improvement fee on all electric vehicles registered in Indiana and increases the current alternative fuel vehicle fee to $150,
  • requires INDOT to further study tolling and submit a waiver to the federal government to allow tolling on existing interstates,
  • lowers the minimum population threshold applicable to the municipal wheel tax/surtax from 10,000 to 5,000.

You can access a fiscal summary of HB 1002 here, including how the bill allocates funds to INDOT and local governments.

The Ways and Means Committee, chaired by Representative Tim Brown (R-Crawfordsville) and the Roads and Transportation Committee, chaired by Representative Ed Soliday (R-Valparaiso) will hear the bill in a joint committee meeting on Wednesday, January 25 at 9:00 a.m. in the House Chamber. BIC is working with our road funding partners to coordinate testimony in support of the bill.

ACTION REQUIRED: BIC strongly supports HB 1002. House members in both the Republican and Democrat caucuses are discussing this bill in private meetings. House members have various concerns. Anti-tax groups that oppose the bill have already been contacting legislators. It is important that ALL House members receive a phone call or email from supporters of this bill before it is heard in Committee on January 25. Obviously, members of the two committees are very important to this first step, and you can see the lists of committee members at these links: Ways and Means Committee and Roads and Transportation Committee. However, ALL House members need to receive a contact from supporters of HB 1002. Please contact your State Representative, regardless of political affiliation, by January 25 and express your strong support for HB 1002. Also, send me an email if you get a response from your legislator. For a link to your State Representative, click here. Remember, we will focus on House members only at this time; we will focus on Senate contacts later in the session.

Governor Eric Holcomb’s Priorities Include 20-year Plan to Fund Roads and Bridges
At a press conference last week, Governor Eric Holcomb announced that his legislative agenda for the 2017 session includes creation of a 20-year plan to fund roads and bridges (click here). He noted the importance of funding for both state and local roads and bridges. He said that funding options include fuel taxes, indexing, P3s, new tolling options and fees for alternative vehicles.

Senate Leaders Say It’s Time to Address Long-Term Road Funding
In a press conference on Tuesday, Senate Republican leaders said that their priorities for the 2017 session include implementing a long-term road funding plan. President Pro Tem David Long (R-Fort Wayne) and Senator Mike Crider (R-Greenfield) spoke about the issue. Senator Long acknowledged that while it’s hard for his caucus to talk about increasing taxes, they cannot continue to fund roads from the state general fund. He noted that U.S. House Speaker Paul Ryan has said the same about the federal budget, and that states are going to have to implement solutions to address road funding shortfalls. Senator Long said Indiana is $1 billion short annually and that he wants to find a solution for 20 years. He expects the final plan will include a mix of new revenue and fees. He also said that gas tax is the accepted method to pay for road improvements and that he could support tolling for new roads or new lanes.

Bottom Line
We are thankful and encouraged that our state leaders have made this a priority. However, we cannot be complacent. Everyone must engage during this legislative session. Please take the action requested above. Call me or send an email if you have any questions, and with any feedback you get from your legislator. Thank you.