Originally printed as an Opinion in the Journal Gazette, April 20.
With only days left in the session, the Indiana General Assembly faces a major task – approval of a long-term transportation funding plan capable of meeting needs in communities statewide.
“We believe there’s a real opportunity in this legislative session to – literally – make a once-in-a-generation investment, not only in state infrastructure needs but in city, town and county infrastructure needs,” said Matt Greller, CEO of Accelerating Indiana Municipalities, the former Association of Cities and Towns. “Our push is to solve the whole problem – don’t go a quarter or a half of the way.”
The House-approved version of House Bill 1002 is best designed to go the distance. When its provisions are fully implemented in four years, the House version would dedicate about $1.4 billion to local government; the Senate version just $700 million.
The revenue difference comes largely from the Senate’s decision not to shift all revenue collected from the state sales tax on gasoline to roads – a key provision of the House plan. The revenue stream available from the House-approved bill would allow communities to tackle a growing backlog.
“Anything short of there, we’re going to continue to see roads in cities and towns and counties deteriorate and not be where citizens expect them to be,” Greller said.
Of about 95,000 road miles in Indiana, local municipalities and counties are responsible for 84,000 miles.
But declining gasoline sales tax revenue – the result of more fuel-efficient vehicles – is making it more difficult for local government to meet infrastructure obligations. In Columbia City, for example, Mayor Ryan Daniel said a short-term boost in road and street funds approved by the legislature a year ago only brought the city back to its level of funding a decade ago.
“All of the costs for repair and replacement have increased over that time,” he said, “which is why we’ve had to replace revenue with income and property taxes, which makes it less of a user tax and more of a tax on where you live and work.”
The state’s failure to fund infrastructure improvements adequately was felt sorely in Columbia City, the mayor said.
“It’s a project that’s now finished, but the state delayed resurfacing of State Road 9 for two years. That’s our Main Street – I got more complaints about that than almost anything else, so there is a need from (the Indiana Department of Transportation’s) perspective, but also for our local roads and streets.”
Columbia City spends about $250,000 to $300,000 a year on road repairs. The House version of the transportation bill could bolster that amount by as much as 40 percent.
Daniel said he believes his constituents understand the need and support the tax increase necessary to fund the transportation plan.
“Northeast Indiana is a very conservative area. Any time you bring up the word ‘tax’ and ‘increase’ is included – you get pushback,” he said. “But I’ve heard from multiple residents that while they don’t go along with all of the increases, they are willing to take the hit at the gas pumps.”
The need for additional revenue is great not only in Columbia City. A study by Purdue’s Local Technical Assistance Program found it would take $775 million a year for the next 10 years to bring Indiana’s local roads and streets into fair or better condition.
“I’m really optimistic,” said AIM’s Greller. “Everyone seems to be signed on or resigned to the fact that a tax increase is imminent, so I don’t think that’s the question. Maybe it’s implemented over a longer period of time. … I think the biggest question is – with the state’s positive revenue forecast last week and the discussion of transferring the sales tax on gasoline – how much of that will happen and are we able to get to a number that fully funds local government, and what role will tolling play five, six, eight years out, as you continue to see diminishing returns on the gas tax?”
Indiana’s cities, towns and counties – many of them struggling to maintain population – need the help an adequately funded transportation bill can provide. They need it to keep their communities attractive to residents and to maintain and attract the jobs that are their lifeblood.