Indiana Legislative Task Force Urges Tax, Fee Hikes to Boost Road, Bridge Funding

AASHTO Journal, 22 December 2016

A bicameral task force of the Indiana General Assembly recommended that lawmakers consider raising various excise taxes and fees to raise about $1 billion a year more for road and bridge investments.

News reports said the task force’s action sets the stage for the legislature starting next month to begin considering revenue-producing measures for the Indiana Department of Transportation that include raising gasoline, diesel, natural gas and other fuel taxes and indexing them for inflation.

capitol0816.jpgThe panel of lawmakers voted 10-1 Dec. 19 to adopt a draft report that recommends 12 funding measures to the General Assembly. The panel reportedly estimates the annual project investment need at $900 million to $1.2 billion a year more than INDOT now receives to maintain and improve the roads system.

The task force called for the legislature in its 2017 session to adopt “a data-driven, comprehensive and sustainable long-term plan for funding Indiana’s road and bridge infrastructure needs at both the state and local level.”

Besides raising fuel taxes – for the first time since 2003 for gasoline and since 1988 for truck fuels – the task force recommended enacting “road usage fees on alternative fuel vehicles, electric vehicles and other vehicles which pay little or no fuel tax in support of their use of the roads.”

It also urged the legislature to hike a tire disposal fee, tighten enforcement of overweight trucks, implement a new fee on all vehicles registered in Indiana, shift more revenue from a gasoline sales tax to transportation and explore options for tolling interstates and state-controlled highways.

And it called for “a limited restoration” of the Indiana Finance Authority’s ability to tap what it called “smart debt financing” that includes the use of grant anticipation revenue bonds and long-term USDOT loans, so long as the expected life of projects they would finance exceeds the debt repayment period.

The task force also called for legislation requiring INDOT to develop “a set of generally accepted road and bridge metrics,” which include measuring asset condition, congestion, safety and economic contribution. INDOT would be required to benchmark the state’s transportation system against other states using such metrics, set clear goals for the transportation system that could be measured on a regular basis and develop a statistical model to prioritize projects and predict future funding needs.

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