A Senate committee voted Thursday to give Republican Gov. Mike Pence just half the road funding he wants - $200 million that could be used to pay for key improvements to interstates.
The move is a partial blow to one of the governor's key legislative goals: Freeing up $400 million that had previously been set aside in a transportation trust fund for spending now.
But Senate Appropriations Chairman Luke Kenley, R-Noblesville, said declining state revenues mean saving some of the money is a good idea. "We're running a little bit behind" on state revenues, he said.
"The other $200 million will be held and then when we have our budget discussions next year, if we want to keep it in the fund or roll it to maintenance, we'll have the opportunity to decide that," Kenley said.
The General Assembly voted last year to put $400 million into the Major Moves 2020 Trust Fund to save for projects that included widening Interstates 69, 65 and 70.
But Pence and the Republican-controlled House made spending the $400 million sooner a top priority, saying the money is needed now and inflation will make the money worth less later.
The House approved legislation to transfer the $400 million out of the trust fund and into the state's general highway account. House Bill 1002 also allocated $25 million to a grant program for local road projects - money the Senate stripped out of the legislation.
House Speaker Brian Bosma, R-Indianapolis, said Thursday that grant program is especially important given the cold, snowy winter.
"Locals have a lot of challenges especially with the amount they've spent on salt - record amounts - and other maintenance and snow removal," Bosma said.
Democrats on the Appropriations Committee were similarly frustrated by the amendment to eliminate the grant program.
"I saw some real benefit to that in communities around the state," said Democratic Sen. Tim Skinner of Terre Haute.
However, Kenley said the money had originally been earmarked for major projects and should stay that way.
Actually, Kenley had been a skeptic of spending the trust fund money at all. He was the driver behind creating the Major Moves 2020 Trust Fund and advocated saving the cash for the state's most expensive projects.
But on Thursday, the senator said the Indiana Department of Transportation "made a good case that some of the money would go to the Major Moves type of areas that it was intended for originally."
INDOT officials have testified that several interstate projects will be ready to go soon and will cost more if they are delayed.
Still, some Appropriations Committee members were concerned about the state's overall financial picture. Tax receipts are running behind projections and the state is facing some unexpected expenses.
That led the committee to vote Thursday to delay spending the additional $200 million. Kenley said lawmakers should decide next year - when they're drafting the next two-year budget - whether to spend the money.
Pence's office released a statement: "Gov. Pence is encouraged by the passing of a key agenda item out of Senate Appropriations and looks forward to continuing to work with the House and Senate to ensure that we have the best tools and infrastructure to enhance Indiana's position as an economic engine."
Bosma said Thursday legislative leaders would continue to talk about the road funding issue through mid-March, when the session is scheduled to end.
"We may not spring all the Major Moves 2020 fund," Bosma said. "But I think we're going to come to a reasonable conclusion and compromise on that as well."