Road funding passes with no tax increases and no long term solution

House members applaud the passing of the roads bill.

By Rachel Hoffmeyer

Lawmakers came to a compromise on a short-term road funding plan, but it fell short of Gov. Mike Pence’s original request for $1 billion dollars for state roads.

About $1 billion total will be used to fund road improvements over the next two years, with roughly a third of the money going to state roads and two-thirds going to local roads.

The plan does not raise state taxes, as originally proposed by House Republicans—a plan House Speaker Brian Bosma called “courageous.”

“That’s one of the reasons I’m particularly gratified with our team that saw what the right thing was to do and decided to take the step, assuring that we have the discussion next year,” he said. “I don’t it was cautious. In fact, I think it was a fairly bold session for a short, 10 week session.”

But the idea of a tax increase during an election year did not sit well with many legislators.

Instead, the plan approved by both the House and the Senate draws money from the state’s reserves. The plan also redirects a penny and a half of the state’s sales tax on gasoline to fund road projects. They’ll also use money from an investment account leftover from the long-term lease of the Indiana Toll Road.

Even though the plan doesn’t raise taxes at the state level, it does provide options for local governments to increase taxes.

Bosma said they designed the plan to be short term to push everyone to develop a long-term solution next year when the two-year budget will be discussed.

A task force will be set up to develop a long-term plan for state highway and major bridge needs. The group will include legislators, members appointed by the governor and the commissioner of INDOT.

The compromise also includes money for pet projects for both Pence and Bosma.

Pence will receive $42 million for his Regional Cities plan, which helps fund projects to improve quality of life, economic development and job creation. The program was originally designed to award two regions with $42 million each, but Pence chose three winners and asked the General Assembly for the additional funding.

Bosma also gets $10 million for his scholarship program for top high school graduates who commit to teaching for five years. The program, beginning in the 2017-2018 school year, will provide $7,500 a year to up to 200 students.

Another $29 million is set aside for a bonus pension check for retired government workers, referred to as the 13th check. Money for the Regional Cities Initiative, the teacher scholarship program and the 13th check will come from the tax amnesty revenue.

The plan now goes to the governor for consideration.