Transportation funds need both short term and long term solutions
By Matt Mikus email@example.com March 10, 2013 10:56PM
Matt Mikus, Post-Tribune reporter. | Jeffrey D. Nicholls~Sun-Times Media
Updated: April 12, 2013 6:16AM
The Statehouse is looking at the need for more road funding. Both the House and Governor Mike Pence’s proposed budget try to restore funding to transportation infrastructure.
Pence’s budget would pump $347 million into road repair and infrastructure, but is less than the $500 million proposed by the House Republicans, and only puts money into the infrastructure if there’s a surplus. In the House budget, the entire gas tax will be used, and half of the funds would go to local governments. Currently the tax is also used for the State Police and the Bureau of Motor Vehicles.
As the discussions for the state budget continue, and new efforts by Pence and outside groups like Americans for Prosperity to push for a 10 percent income tax cut, the amount of money available in the short term is still unknown.
While federal funds have stayed relatively level, funds for the state are getting tight, as the Indiana Department of Transportation has cut $70 million in operation funds to insure they can capture all the dollars available from Uncle Sam.
Still, in order to keep up with needed repairs, INDOT expects it needs about $200 million to meet the needs for the state.
“With that, we’d be able to get ahead of the curve of asset management,” INDOT spokesperson Will Wingfield said, “it would allow us to get ahead of the deterioration of current infrastructure.”
Rough roads ahead
While the proposed budgets offer transportation, funding will become more and more scarce as the costs to repair continue to rise.
The cost of wearing down roads is paid through fuel tax in Indiana, at 18.4 cents per gallon. But as cars become more fuel efficient, the new fleet must get 56.2 miles to the gallon by 2025, the amount of money diverted to repair roads will continue to fall. Between 2011 and 2012, the generated revenue fell from $543.1 million to $534.7 million.
At the same time, taxes are applied through a sales tax, but none of it goes to infrastructure.
“We’re getting more miles to the gallon,” said Rep. Ed Soliday, R-Valparaiso, “And people are driving less too. Bottom line, we have to find ways to maintain the roads.”
Soliday serves as a chair of the Roads and Transportation committee.
At the same time, fuel choices are becoming more diverse. Commercial shipping companies are considering compressed natural gas, and electric cars wouldn’t contribute to roads at all.
Already bills have passed the House to begin patching potholes in the tax code, including tax structures for natural gas, and to study an alternative tax system based on mileage driven rather than gallons purchased.
And for local roads, counties will also need to find options. 47 counties currently use a wheel tax, and some counties use part of a local option income tax.
“It took a number of years for this problem to build up,” Soliday said, “Whatever solution we have to this problem, it will have to be shared between the local and the state. We’re going to have to find a gradual approach to get us back on track.”