By Max Bomber
and Jasmine Otam
INDIANAPOLIS — The new road funding plan puts more power in the hands of local government to raise taxes to pay for improvements.
About $1 billion will be used to fund road improvements over the next two years, with roughly a third of the money going to state roads and roughly two-thirds going to local roads.
Gov. Mike Pence holds a press conference to talk about key legislation, such as the bipartisan road funding plan, that passed during the 2016 legislative session. By Jasmine Otam, TheStatehouseFile.com
“I am pleased beyond words that we were able to work in a collaborative way with members of both parties in both chambers to move the agenda that we have advanced in this session,” said Gov. Mike Pence.
The plan makes $430 million available to local governments for improvements to local roads and bridges through income taxes being held by the state. At least 75 percent of the local income taxes being released by the state must be used on roads, but officials can spend all of it, if they wish.
“Local government is responsible for taking care of their own needs, okay? We give them different tools and we also give them money out of our revenue,” said President Pro Tem, David Long, R-Fort Wayne. “Both federal dollars and our gas tax revenues… but clearly they have additional needs.”
The plan allows cities and towns with a population of at least 10,000 to adopt their own excise or wheel tax, separate from the county.
The plan also puts $253 million in a Local Roads and Bridge Matching Account. The account provides dollar-for-dollar matching grants for local road projects. The matching funds can come from the local rainy day fund, the withheld income tax money being released from the state or from the increase in an excise or wheel tax.
Half the money in the matching account must go to counties with population less than 50,000.
Long said he thought this plan was a more prudent investment of the taxpayers’ money.
“We felt it was premature to do any kind of revenue enhancements until we had a better grasp of what the state’s roads needs are,” said Long.
A task force will be set up to develop a long-term plan for state highway and major bridge needs. The group will include legislators, members appointed by the governor and the commissioner of INDOT.
Max Bomber and Jasmine Otam are reporters for TheStatehouseFile.com, a news website powered by Franklin College journalism students.