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Yahoo
28-01-2025
- Business
- Yahoo
Indiana lawmakers turn to local governments in quest for road funding boost
Rep. Jim Pressel, R-Rolling Prairie, presides over his committee on Monday, Jan. 27, 2025. (Leslie Bonilla Muñiz/Indiana Capital Chronicle) Cash-strapped local governments could soon pick from a broader menu of ways to self-fund transportation infrastructure — including through contentious delivery fees or township surplus funds — but wouldn't get any more financial aid directly from the Statehouse. 'We need investment and assistance from the state, but this legislation doesn't include it,' said Ryan Hoff, government affairs director and general counsel for the Association of Indiana Counties. He was among nearly two-dozen witnesses who testified before the House's Roads and Transportation Committee on Monday. The wide-ranging House Bill 1461 also changes allocations and adds requirements for the popular Community Crossings Matching Grant Program; cracks down on economic development incentives; and brushes some dust off long-untouched tolling possibilities. Author Rep. Jim Pressel, R-Rolling Prairie, called his proposal '37 pages of options.' 'There's some really good things in here, there are some things that are maybe not so great, but we need a conversation on: is this good policy?' he told the committee, which he chairs. Lawmakers seek road-funding changes, hope to avoid fiscal cliff Pressel and others spent almost two years studying up on revenue-raising possibilities to head off an anticipated fiscal cliff. Motor fuel taxation yields eight of every 10 state dollars that fund roads and bridges for both the Indiana Department of Transportation (INDOT) and local governments. But as Hoosiers upgrade to more fuel-efficient vehicles — or try electric and hybrid options — there is less money to work with. And inflation means those dollars aren't stretching as far. INDOT Legislative Director Aaron Wainscott said his agency has lost out on $1 billion already and has had to postpone 300 projects. Hoosier communities, meanwhile, face an annual funding gap of nearly $500 million per year in construction costs just to keep road conditions as-is, according to Purdue University's Local Technical Assistance Program — plus more to see improvements and to fund bridges. Witnesses offered mixed testimony at the hours-long meeting. 'There's a little bit of everything in this bill,' said Brian Gould, executive director of the Build Indiana Council. '… I have yet to talk to one stakeholder that's said, 'I love everything in this bill,' but I think everyone I've talked to has also said, 'We can work with this. This is a good place to begin the conversation.'' The committee didn't vote on the measure. Pressel hopes to hear amendments at the body's next meeting. Hoosiers could see new fees tacked onto their Amazon, DoorDash and other delivery orders. Pressel's legislation would empower counties to impose fees — of between 50 cents and $1 — per retail delivery. Purchases not subject to sales tax, like groceries, would be exempt. A fiscal analysis by the nonpartisan Legal Services Agency estimated that a fee of 50 cents per delivery could raise $22-$27 per resident, and more if counties choose a higher rate. A range of business advocates opposed the fee, saying it would hurt family restaurants and other small businesses, and would present a complex administrative burden. Pressel, meanwhile, read a list of fees — totaling about $12 — off a constituent's $35 order of chicken wings. 'I just find it hard to believe that 50 cents on top of those fees would be cumbersome,' he said. Brianna January, representing technology industry coalition Chamber of Progress, argued that elderly and disabled residents on fixed incomes rely heavily on delivery and rideshare services. The legislation additionally would let communities tap into surplus money held by townships. These units of local government are county subdivisions. If, at the end of a calendar year, a township's reserves are more than 15% higher than its estimated budget for the next year, the excess money would go to a township transportation infrastructure fund. Townships would collaborate with cities, towns or counties on bidding out projects improving infrastructure within township boundaries. Deborah Driskell, executive director of the Indiana Township Association and Delaware township trustee, said townships hold reserves for good reasons, like for emergencies, and asked to 'tighten up' the measure. She read aloud messages from consultants advising that townships keep six months of operating revenue on hand. The bill's 15%, she noted, would be just a fraction of that. The proposal also offers the state's capital and largest community — the consolidated Indianapolis-Marion County — ways to raise more money for transportation infrastructure. For that community alone, it increases caps on the vehicle excise and wheel tax. And it introduces a referendum-based 'metropolitan thoroughfare district' tax levy specific to the consolidated city-county. It's unclear if three-term Mayor Joe Hogsett would take advantage. His administration has long resisted raising local taxes for transportation infrastructure, protesting that the state's funding formula shortchanges the community. The legislation would also add a $150 million cap to Community Crossings, a matching grant program that local governments can use to fund local road and bridge projects. What's left above the cap would get siphoned off for other purposes. For one year, an estimated surplus of $207 million would fund fixes for dangerous at-grade railroad crossings, according to the fiscal analysis. In later years, the excess would go to the Motor Vehicle Highway Account. That's the pot of money behind the state's transportation infrastructure funding formula; INDOT gets about 62% of it and Hoosier communities split the remaining 38%. On average, between fiscal years 2026-2030, the to-be-transferred surplus is estimated at $62.6 million annually. County and municipality representatives critiqued the legislation for diverting Community Crossings money — which goes to local governments — into an account that sends large shares of money to INDOT. House Bill 1461 also tweaks Community Crossings itself. It adds new application requirements: local governments must adopt ordinances implementing the wheel tax and excise surtax if they can. All counties are eligible; so are municipalities with more than 5,000 people. There are 37 counties and 107 municipalities that could adopt such taxes but haven't, according to the fiscal analysis and Accelerate Indiana Municipalities. And there are more communities that do levy the taxes but don't max them out. Purdue University's Local Technical Assistance Program has estimated a capacity of $458 million, but receipts in 2022 only added up to $123 million — leaving $335 million untapped. Knox County Commissioner Kellie Streeter said her county uses other local funding mechanisms in lieu of the unpopular wheel tax. Instead of requiring that communities adopt it, she suggested Pressel consider the percentage of local effort put into roads and bridges. 'Our constituents looked at that twice. They didn't want it, so we used other … sources. I just ask (that) we be able to have that local control and that decision-making,' Streeter said. 'We want to help ourselves. Many of us do, and we know you want us to help ourselves. So let us have that choice.' Pressel's bill also lowers matching requirements for sparsely populated communities, to the delight of advocates. Lawmakers heard, over the interim, that it takes small local governments years to save up for matches. CONTACT US Another provision would bar the controversial Indiana Economic Development Corp., a quasi-public agency, from offering incentives unless the recipient is on the hook for the transportation infrastructure needed to serve its economic development project. The IEDC has been under fire for land acquisitions, water supply plans and significant investments in the Limitless Exploration/Advanced Pace manufacturing park. Lawmakers have sought to tighten the reins. Business groups, including a statewide and local chamber of commerce, opposed the measure. 'Requiring private business to pay for road infrastructure, if other incentives are involved, could delay and stall important projects,' said Jenna Bentley, the Indy Chamber's vice president for government affairs. 'We'd really like to see increased communication without shifting that burden to business,' she added. Indiana lawmakers gave the governor the power to add tolls to more roads and bridges in 2017. Former Gov. Eric Holcomb, who held office from 2017 until early this month, never took them up on the offer. House Bill 1461 gives that language a refresh. It would let INDOT, with the governor's approval, submit a request for a tolling waiver to the federal government. If the waiver is granted, the Indiana General Assembly wouldn't need to approve authorizing legislation. 'Probably most importantly in this bill is the language initiating an updated conversation about tolling. It is a necessary step forward,' said David Ober, vice president of taxation and public finance for the influential Indiana Chamber of Commerce. Construction, business and other advocacy groups expressed interest in tolling, but others protested the possibility. Indiana Motor Trucks President Gary Langston said trucks engaged in interstate commerce already pay user fees on 'every mile they drive on every road throughout the United States.' He also noted that truckers will keep contributing fuel tax revenue, with diesel alternatives far off for the industry. Langston called for more analysis 'before we make any long-term decisions,' adding, 'Once you put in a toll, it never goes away. All it does is go up.' Tolling could generate $4.2 billion in revenue over the first five years of implementation, starting in fiscal year 2029, according to the fiscal analysis. Indiana could receive an estimated $38.2 billion in revenue over the 22 years between 2029 and 2050. But how's new Gov. Mike Braun feel about that? An office spokesperson didn't provide comment before publication time. Numerous witnesses agreed: something has to change. 'Relying on our current funding mechanisms means … guaranteed shortfalls in funding, delays on much-needed projects, and the burden to fund our infrastructure will continue to fall on the backs of Hoosiers,' said the Build Indiana Council's Gould. 'Folks aren't coming in looking and asking to pay more,' Gould continued. 'But … I can't have anybody say … 'Please don't fix my road. I enjoy the congestion driving bumper-to-bumper on I-65. I like the bumpy ride on I-70.' We know there's work to be done, and this is a great place for us to start that.' SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX
Yahoo
28-01-2025
- Automotive
- Yahoo
Another fee on your DoorDash order? Indiana lawmakers say it could go toward road funding.
Anyone who's ordered from a food delivery service knows that by the time taxes and fees and tips are tacked on, the total bill could be $10-20 more. What's another 50 cents or a dollar, some Indiana lawmakers are asking, if it could go toward road repairs in your community? That's one question House Bill 1461 poses, among a host of other financial tools aimed at chipping away at Indiana's road funding woes ― including tolling on interstates and the ability for Indianapolis to enact a special tax referendum for roads. The bill would give counties the ability to impose a 50-cent to one-dollar fee on each retail delivery that happens within a county, from food deliveries to ride services. More: Should Indianapolis raise taxes to fix poor roads? State lawmakers, mayor in talks Local governments need nearly $1 billion more than they are currently getting each year for the next 10 years in order to simply preserve the condition of the roads and bridges they maintain, which make up nearly 90% of the roads Hoosiers drive on. That gap only increases if they want to actually improve those roads, according to estimates from Purdue University's Local Technical Assistance Program. More than 80% of state revenue for roads comes from fuel taxes, INDOT legislative director Aaron Wainscott said. As cars get more fuel efficient and electrified, and as the cost of construction materials have inflated, INDOT has lost and will continue to lose purchasing power, he said. The House roads committee heard the bill on Monday but did not take a vote. The question facing counties, should the bill pass, is whether administering an extra fee on food delivery would be worth the hassle in order to funnel a few extra million toward road repairs. A fiscal analysis of the bill estimates that if all counties were to adopt this fee in 2026, local road revenue could increase between $150 million and $190 million. To get more granular: If Indianapolis adopted a 50-cent fee, it might get $20-24 million in return. The bill exempts smaller businesses, such as retail businesses making less than $1 million in sales annually, and delivery services or rideshares that facilitated less than $100,000 in transactions the previous year. In other words, this is really targeted toward deliveries made by companies like DoorDash and Uber. Doordash, through a spokesperson, estimates that if such a tax were to be implemented statewide, Hoosiers would pay $28 million in additional taxes annually, and merchants could lose more than $49 million from lost business. More: As local streets crumble around the state, lawmakers unlikely to fix key funding issue A representative from a tech industry coalition that these companies are partners of, Chamber of Progress, said this fee would hurt constituents on fixed incomes in particular. Brianna January, the Chamber's northeast director of state and local government relations, gave the hypothetical example of Jane, someone on a fixed income of $1,200 a month who relies on these services to get her groceries delivered and be driven to doctor appointments. Such a fee could add up to $30 a month. "I implore you to think of the Janes in your poor district," January said. Bill author Jim Pressel, a Republican representative from Rolling Prairie, said he's fielded plenty of emails on this one. He's heard the feedback that this provision would contribute to food deserts. But he said he's skeptical that the burden would be that cumbersome compared to the much higher fees already tacked on. The major road funding bill of 2017 gave INDOT the ability to pursue new toll roads, with the approval of the governor but without needing General Assembly approval. House Bill 1461, though, would remove two restrictions to make it even easier. First, INDOT would not have to do a feasibility study beforehand. Second, if the agency applies for the requisite waiver from the federal government by July 1, it can toll lanes anywhere. (Current law says INDOT cannot toll within 75 miles of an existing toll road.) Indiana currently has one toll road, spanning 157 miles across northern Indiana. Former Gov. Mitch Daniels leased that toll road to a private company in 2006 in exchange for a lump sum payment of nearly $4 billion. INDOT could decide to lease a new toll road for another lump sum, or it could contract with a concessionaire and share revenue. Either way, it could be a boon for the state: fiscal analysts project tolling could result in an extra $850 million a year in state revenue on average, and $32 billion over a 22-year period, though it's unclear how many miles of tolling that would require. Gary Langston, president of the Indiana Motor Truck Association, called tolling an "inefficient and inaccurate process" compared to fuel taxes, and predicted the administrative costs would be far higher. Truckers, he said, only stand to be hurt by such a move, since fuel-efficient trucks are nowhere near the commercially available horizon. "Tolling proponents are quick to talk about the importance of making sure all who use the roads pay for them, and that fuel is going away," Langston said. "Neither of those concerns currently apply to the trucking industry. Diesel is not going away anytime soon." But Jenna Bentley of the Indy Chamber said the benefit of tolling is to help Indiana reap the benefits of drawing out-of-state workers and travelers. "It's critical that out-of-state commuters continue to pay their fair share," she said. As IndyStar previously reported, this bill would give Indianapolis the ability to put a referendum question to Marion County voters on whether to raise a property tax in order to pay for road work. The bill would also triple the size of the wheel and excise taxes that Marion County could choose to levy on those who register vehicles in the county. This reinforces a message state lawmakers have consistently told Indianapolis, whose local officials argue the road funding formula is disadvantageous to urban areas: Maximize the local tools you have before we change state funding. City and state officials have been in talks about the property tax referendum option, which Indianapolis chief deputy mayor Dan Parker called an "interesting new tool." But the city is opposed to increasing its wheel and excise taxes. "The mayor has been consistent on this position for a long time, that he's not going to ask Marion County residents to pay more while the taxes they currently pay don't follow traffic, are not invested back in those communities that have the most traffic," he said. "So you're asking our residents to pay more for a system that we feel is broken." Pressel said he's just trying to provide more "tools in the toolbox." "If I was on the council I wouldn't vote for it either," he said during the bill hearing. "That being said, I'm not on the council." Contact IndyStar state government and politics reporter Kayla Dwyer atkdwyer@ or follow her on X, formerly Twitter, @kayla_dwyer17. This article originally appeared on Indianapolis Star: An extra fee on delivery services could pay for Indiana roads
