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Last updated on Thursday, April 27, 2017
(STATEHOUSE) - Gov. Eric Holcomb signed legislation into law today that will make the largest investment in state and local infrastructure in Indiana’s history, according to State Rep. Chris May (R-Bedford).
May said House Enrolled Act 1002 will provide immediate and substantial funding increases for state and local roads and bridges. Beginning in July of this year, the legislation will provide an additional $357 million in state and $260 million in local road funding. These additional investments will continue to increase year-over-year, reaching $1.2 billion in 2024, with nearly $900 million expected in new state funding and an additional $340 million in new local road funding.
"Our top priority this session was to pass a data-driven, sustainable plan to fund our state's infrastructure," May said. "This historic investment ensures Indiana's strong fiscal environment is maintained because it doesn't spend down critical reserves or cut into the state's general fund, which would risk our state's AAA credit rating. Rather, it takes a conservative approach by creating long-term and sustainable sources of funding dedicated exclusively to maintaining and improving Indiana's roadways both at the state and local level."
The plan increases user fees by 10 cents per gallon on gasoline, special fuel and motor carrier surcharge taxes to restore buying power lost to inflation. These user fees would be indexed annually for the next seven years but wouldn't increase more than 1 cent per year. The gasoline tax has not been increased since 2003, and the other user fees haven't been increased since 1988. May said this ensures that those who use and benefit from the roads help pay for them.
The remaining 4.5 cents of the sales tax on gasoline would be shifted over five years starting in 2020 from the state's general fund to the State Highway Fund, which is dedicated exclusively to roads and bridges. By 2024, every cent in state tax paid at the gas pump will be dedicated solely toward road and bridge funding.
The measure calls for a new, $15 annual fee on all vehicles, a $50 annual fee for hybrids and $150 annual fee on electric vehicles registered in Indiana. The money would provide a sustainable source of funding for Indiana's Community Crossings Matching Grant Fund, which provides road funding to local governments. May said important changes were also made to expand grant eligibility to help smaller cities, towns and counties fund local infrastructure.
Under the proposal, the Indiana Department of Transportation would study tolling and submit a waiver to the federal government that would allow Indiana's executive branch and the State Budget Committee to approve potential tolling projects.
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