DALLAS – Indiana lawmakers have agreed on a compromise road funding plan to provide more than $1 billion for transportation projects over the next two years while postponing a solution to the state's infrastructure funding gap until next year's legislative session.
The plan, which would resolve differences between House and Senate proposals, does not include increases in the state's gasoline and diesel taxes that House members favored but were opposed by Senate Republicans and Gov. Mike Pence.
Pence is a Republican as are 71 of the 100 members in the House and 40 from the 50-member Senate.
The compromise plan would provide $328 million for state highway projects and $254 million for local roads over the next two fiscal years from Indiana's budget surplus. Another $430 million of excess local option income taxes that the state has been withholding would be released to local governments.
The House adopted a bill in early February that would have raised the state's gasoline tax by 4 cents from the current 18 cents per gallon and the diesel tax by 7 cents from the current 16 cents per gallon, as well as index them to inflation.
The tax increase would have generated $500 million per year for transportation projects.
The Senate had earlier approved Pence's five-year, $1.4 billion "21st Century Crossroads" funding plan that relies on $240 million of new highway bonds and $241 million from the $2 billion budget surplus but no new taxes. The plan included annual budget appropriation of $150 million in fiscal years 2018, 2019 and 2020.
House Speaker Brian Bosma, who supported the gasoline tax increase, said the compromise means a decision on long-term funding will be delayed until next year's General Assembly biennial budget session.
"I wouldn't buy that we've solved problems with this," Bosma said. "We have challenges on our ongoing future road and bridge funding at the state level and this does not solve that. It addresses immediate needs, meets some of our long-term goals and assures that everyone is at the table in the budget session to work on the long-term issue."
The compromise road plan recognizes the problem of getting a gasoline tax through the Republican-controlled General Assembly during an election year, Bosma said.
"I had said in my initial announcement of this that I knew it was going to be a heavy lift in an election year and short session," Bosma said. "So we've structured it in such a way we're guaranteed to come back to the table next year."
Indiana spends about $570 million per year on state roads, but a 2015 transportation funding study said the state needs to spend $1.5 billion per year over the next 20 years to keep its existing transportation infrastructure in good condition.
The transportation study said the $450 million per year that Indiana's fuel taxes now generate will dwindle to $300 million due to inflation over the next 10 years.
