On the heels of celebrating Back to the Future Day, it seems only appropriate to paraphrase Dr. Emmett Brown while also looking at a few of the predictions that the celebrated movie series didn’t quite get right. No, we aren’t traveling to work on our hover boards quite yet, and the Cubs fell just short of that elusive World Series title (there’s always next year, Cubs fans). But from a public policy perspective, since we haven’t quite perfected the flying DeLorean, we are still going to need roads to get us where we are going. And how we pay for those roads is one of the major issues facing Hoosier lawmakers as we look toward the 2016 Session of the Indiana General Assembly.
In his 2015 Session post mortem, House Speaker Brian Bosma (R-Indianapolis) announced that his one disappointment was the failure to increase infrastructure funding as much as he would have liked. The legislature increased infrastructure funding by more than $200 million in Fiscal Years 2014 and 2015, but competing interests prevented them from adding additional funding beyond those levels in the current budget. Speaker Bosma predicted a renewed focus on road funding in 2016 and 2017, and several incidents this interim have only added to the urgency.
Most disruptive was the closure of northbound I-65 in Lafayette for nearly a month this summer due to problems with the Wildcat Creek Bridge overpass. Though the closure did not appear to be the result of neglected or antiquated construction, the headaches certainly brought attention to the issue. More recently, reports surfaced of nearly 200 road projects that may have been constructed using a faulty asphalt compound, causing the pavement to age prematurely. Several major roadways less than three years old are already showing signs of significant deterioration, even though the life span of the asphalt should be closer to 20 years.
Perhaps most importantly, a good number of Indiana’s highways and bridges are simply old and are approaching the end of their useful life. The issue for lawmakers is how to foot the bill for the necessary improvements and also find money to fund highway expansion projects. The problem is exacerbated by the fact that the gasoline excise tax continues to generate less revenue each year due to more fuel efficient cars on Hoosier roadways.
Members of the Roads and Transportation legislative study committee held a series of meetings this interim to take a comprehensive look at the current funding shortfall and discuss potential solutions. House Transportation Committee Chair Ed Soliday (R-Valparaiso) expressed frustration with the apparent moving target presented by the Indiana Department of Transportation, which recently stated that an additional $250 million per year was needed to simply maintain existing roads yet earlier this summer had called for $300 million in additional funding.
The committee was presented with a study from Cambridge Systematics outlining 17 potential funding sources that could boost annual revenue anywhere from $10 million to $1 billion annually. Options include increasing the gasoline excise tax, indexing the gas to the inflationary rate and imposing new taxes and fees on interstate trucks or motor vehicle purchases. Chairman Soliday also suggested raising the state’s cigarette tax by $1.00 per pack.
Indiana Governor Mike Pence recently unveiled a proposal that would provide $1 billion in road funding over the next four years, with nearly half of that total ($487.5 million) appropriated in Fiscal Year 2017. The plan calls for no tax increases and instead generates the revenue from the following sources:
- $241 million from the state’s reserves.
- $450 million in budget appropriation requests in FY 2018 through FY 2020 ($150 million per year).
- $50 million in FY 2019 from the “Next Generation” trust fund.
- $240 million in FY 2017 from new bond financing.
- $26 million from FY 2017 though FY 2020 from refinancing of existing bonds.
The proposal was met with a cool reception by legislative leadership. House Ways and Means Chairman Tim Brown (R-Crawfordsville) said that he was “concerned about taking on any debt against the state’s ongoing operating expenses,” while Senate Appropriations Chair Luke Kenley (R-Noblesville) expressed similar concerns.
Despite the growing focus on Indiana’s infrastructure needs, most experts doubt we will see a long-term fix to the problem in 2016 given that it is a short, non-budget session. Long-term solutions will likely wait until the 2017 budget session, meaning road funding will most certainly be an issue during next year’s gubernatorial election. Democrats have continued to highlight the issue, focusing on the I-65 closure, and have criticized the governor’s plan as being small-minded and lacking any sort of funding plan for local roads. Democrat John Gregg, who is challenging Governor Pence, has yet to release a road funding plan as part of his campaign.
So the question becomes what will Hoosiers see first — a long-term strategy to fix the crumbling infrastructure, or the Cubs breaking their now 107-year-old title drought? If only we could see the future…