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INDOT facing road-upkeep cash crunch, seeks tax hikes

– Indiana transportation officials told a key budget committee Wednesday that an additional $200 million a year is needed to maintain the state’s highways and bridges.

Indiana Department of Transportation Commissioner Michael Cline said that money could save $2 billion in more extensive repairs over a 20-year period.

INDOT revenue is expected to be about $1.5 billion in each of the next two fiscal years. The total for the upcoming two-year spending cycle is down 23 percent from the current biennium ending in June, Cline told members of the State Budget Committee.

A large part of the loss is that virtually all proceeds from the Indiana Toll Road lease have been spent or obligated. And the state’s gas tax collections – along with consumption of gas – have dropped due to more fuel-efficient vehicles.

The latter is a long-term sustainability problem lawmakers need to address.

“It’s a question every state is facing,” State Budget Director Adam Horst said.

A number of ideas exist to tackle the declining road dollars. One is raising the 18 cent-a-gallon gas tax. But each penny brings in less money every year – currently about $30 million – and the trend wouldn’t change.

Other suggestions are increasing license plate fees, indexing the gas tax to inflation for automatic adjustments and creating a new system of taxation based on how much drivers use the roads.

INDOT officials provided models on how much revenue would be created by attaching the gas tax to various measures of inflation. The state’s models showed that revenue would be between $120 million and $200 million more annually.

House Ways and Means Chairman Tim Brown, R-Crawfordsville, asked about the dollars the state gets from charging sales tax on gasoline purchases, none of which goes to pay for road improvements.

Indiana is also one of only a handful of states that still collect sales tax on gasoline, and Cline said it would help if some of that money were diverted from general state funding to roads.

The sales tax collected on gas currently brings in more dollars than the state’s gas tax.

Cline said that the number of bridges and roads in poor condition would jump more than 40 percent in the next decade if current spending levels on maintenance remain.

But he stressed, “This is not a question immediately about safety. Our bridges are safe.”

Instead, he said the future repairs will be more expensive, comparing it to replacing engines in a car rather than getting regular oil changes.

Sen. Tim Skinner, D-Terre Haute, also brought up local road funding problems, saying, “We’re at the point of critical mass out in the counties.”

Counties receive some state and federal dollars and have the ability to implement a wheel tax on vehicles. Some counties still haven’t used that authority or haven’t increased it to keep up with needs.

Rep. Terry Goodin, D-Crothersville, suggested giving cities the same authority to adopt wheel taxes.