2017 Transportation Infrastructure Funding

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2017 Indiana House Bill 1002 Overview 

The 2017 Indiana General Assembly primarily addresses the topic of transportation infrastructure funding with Indiana House Bill 1002. The HB 1002 components and data summarized on this web page come from (a) the February 14, 2017, amended version of HB 1002 (which passed the Indiana House of Representatives on February 16, 2017) and (b) the February 16, 2017, fiscal impact statement for HB 1002.

HB 1002 would have the following additional revenue impacts to state transportation infrastructure funds as the result of (a) changing the distribution of the Sales Tax collected on gasoline, (b) changing off-the-top distributions of Gasoline Tax revenue, (c) increasing the Gasoline Tax rate, (d) increasing the Special Fuel Tax rate, (e) increasing the Motor Carrier Surcharge Tax rate, (f) collecting the Motor Carrier Surcharge Tax at the pump, (g) changing the distribution of the Motor Carrier Surcharge Tax revenue, and (h) instituting an Electric Vehicle Supplemental Registration Fee of $150:
Fiscal Year 2018
    $585.2 million State Highway Fund
    $  81.0 million Local Road and Bridge Matching Grant Fund
    $    0.5 million Motor Carrier Regulation Fund
    $    7.9 million State Highway Road Construction Improvement Fund
    $674.6 million TOTAL FY 2018 ADDITIONAL STATE REVENUE
Fiscal Year 2019
    $635.1 million State Highway Fund
    $  94.1 million Local Road and Bridge Matching Grant Fund
    $    0.9 million Motor Carrier Regulation Fund
    $    8.9 million State Highway Road Construction Improvement Fund
    $739.0 million TOTAL FY 2019 ADDITIONAL STATE REVENUE
Fiscal Year 2020
    $693.0 million State Highway Fund
    $  94.7 million Local Road and Bridge Matching Grant Fund
    $    1.3 million Motor Carrier Regulation Fund
    $  10.0 million State Highway Road Construction Improvement Fund
    $799.0 million TOTAL FY 2020 ADDITIONAL STATE REVENUE
Fiscal Year 2021
    $745.9 million State Highway Fund
    $  95.3 million Local Road and Bridge Matching Grant Fund
    $    1.7 million Motor Carrier Regulation Fund
    $  11.2 million State Highway Road Construction Improvement Fund
    $854.1 million TOTAL FY 2021 ADDITIONAL STATE REVENUE

HB 1002 would also have the following additional revenue impacts to local transportation infrastructure funds as the result of (a) increasing the Gasoline Tax rate, (b) increasing the Special Fuel Tax rate, and (c) increasing the Motor Carrier Surcharge Tax rate:
Fiscal Year 2018
    $174.5 million Local Motor Vehicle Highway Account
    $  47.4 million Local Road and Street Account
    $221.9 million TOTAL FY 2018 ADDITIONAL LOCAL REVENUE
Fiscal Year 2019
    $189.8 million Local Motor Vehicle Highway Account
    $  51.6 million Local Road and Street Account
    $241.4 million TOTAL FY 2019 ADDITIONAL LOCAL REVENUE
Fiscal Year 2020
    $204.2 million Local Motor Vehicle Highway Account
    $  55.7 million Local Road and Street Account
    $259.9 million TOTAL FY 2020 ADDITIONAL LOCAL REVENUE
Fiscal Year 2021
    $217.9 million Local Motor Vehicle Highway Account
    $  59.5 million Local Road and Street Account
    $277.4 million TOTAL FY 2021 ADDITIONAL LOCAL REVENUE
NOTE: Local Motor Vehicle Highway Account revenue is distributed to local units as follows: 31.9% to cities and towns, 3.4% equally to all counties, 20.4% to counties based on vehicle registrations as a percent of all registrations in the state, and 44.3% to counties based on county mileage. Distributions from the Local Road and Street Account vary depending on county size, as well as county and local unit population and road mileage.

Additionally, HB 1002 could increase local road funding by (a) making changes to the Transportation Funding Exchange Program and (b) allowing additional municipalities to institute Excise Surtax and Wheel Tax rates.

Total state reserves equal to 10% of forecasted state General Fund revenue are prudently sufficient to meet reasonably anticipated Fiscal Year emergency needs. The current Fiscal Year 2017 state reserves are $196.3 million more than what is needed to prudently meet the state's reasonably anticipated emergency needs. Combining prudent state reserves with the forecasted increases in total state General Fund revenue WITHOUT NEW TAX AND FEE INCREASES results in there being (a) $619.8 million available for new state General Fund spending in Fiscal Year 2018 and (b) $545.6 million available for new state General Fund spending in Fiscal Year 2019. These state General Fund revenues available for new spending in Fiscal Years 2018 and 2019 WITHOUT NEW TAX AND FEE INCREASES can help provide additional transportation infrastructure funding if some HB 1002 components are Taxpayer UNfriendly. The analysis used to reach these conclusions is presented online at http://www.finplaneducation.net/state_reserves_history.htm.

The twenty major components of HB 1002 are summarized next, together with a Taxpayer Friendly evaluation of each component.

HB 1002 Component #1. Fiscal Year 2018 Fuel Tax Rates Increase

The state's Gasoline Tax rate is now $0.18 per gallon, the Special Fuel Tax rate is $0.16 per gallon, and the Motor Carrier Surcharge Tax rate is $0.11 per gallon. It is expected that each of these three fuel tax rates would increase by $0.10 per gallon in Fiscal Year 2018 - the Gasoline Tax rate would become $0.28 per gallon, the Special Fuel Tax rate would become $0.26 per gallon, and the Motor Carrier Surcharge Tax rate would become $0.21 per gallon. The additional tax revenue collected from the Gasoline Tax and Special Fuel Tax rate increases would be distributed 53.5% to the State Highway Fund and 46.5% to local units of government. HB 1002 would change the distributions of Motor Carrier Surcharge Tax revenue by (a) reducing the distribution to the Motor Carrier Regulation Fund from 9% to 4.5% and (b) increasing distributions to the State Highway Fund and the Motor Vehicle Highway Account from 45.5% to 47.75% for both funds. The distribution change for revenue received from the Motor Carrier Surcharge Tax is expected to have no net annual impact on revenue to the Motor Carrier Regulation Fund, but would increase revenue to the State Highway Fund and the Motor Vehicle Highway Account. The three fuel tax rate increases would generate the following additional Fiscal Year 2018 revenues:
$310.3 million more from the Gasoline Tax rate increase
$118.8 million more from the Special Fuels Tax rate increase
$91.8 million more from the Motor Carrier Surcharge Tax rate increase

TAXPAYER FRIENDLY EVALUATION. NOTE: The data and computations used for this Taxpayer Friendly evaluation can be found online at http://www.finplaneducation.net/indiana_personal_income.htm.

Most Hoosier individuals who drive motor vehicles pay the state Gasoline Tax at the gas pump. The Fiscal Year 2018 Gasoline Tax rate increase to $0.28 per gallon would be 82.9% more than the inflation increase since the rate was set at $0.18 per gallon in 2003.

The state Special Fuel Tax is imposed on diesel, biodiesel, and natural gas products (CNB and LNG) sold or used in producing or generating power for propelling motor vehicles. The Fiscal Year 2018 Special Fuel Tax rate increase to $0.26 per gallon would be 33.2% less than the inflation increase since the rate was set at $0.16 per gallon in 1989.

The state Motor Carrier Surcharge Tax is paid by carriers who operate commercial motor vehicles on any highway in Indiana based on the total amount of motor fuel consumed by the commercial motor vehicles. The Fiscal Year 2018 Motor Carrier Surcharge Tax rate increase to $0.21 per gallon would be 2.9% less than the inflation increase since the rate was set at $0.11 per gallon in 1989.

THE BOTTOM LINE: The Gasoline Tax, Special Fuel Tax, and Motor Carrier Surcharge Tax are true user fees in that the amount of money you pay as a driver is directly proportionate to the amount of fuel you consume, which is directly proportional to the amount of driving you do. It would be Taxpayer Neutral to increase the three fuel tax rates by $0.10 per gallon in Fiscal Year 2018 and eliminate the proposed subsequent annual rate increases using the Taxpayer UNfriendly annual index factor. The Indiana General Assembly could consider increasing the three fuel tax rates again in about 10 years when increased Gasoline Tax revenues have been offset by overall Consumer Price Index inflation increases.

HB 1002 Component #2. Annual Fuel Tax Rates Increase

Effective the 2019 Fiscal Year, the Gasoline Tax rate, the Special Fuel Tax rate, and the Motor Carrier Surcharge Tax rate would increase each year based on an annual index factor - but, each of the three annual rate increases would be limited to $0.01 per gallon and the last annual rate increases would be for Fiscal Year 2025. The three annual fuel tax rate increases would be equal to the product of: the rate in effect on June 30 multiplied by the annual index factor. The annual index factor would be computed as follows:
STEP ONE: Divide the annual CPI-U for the year preceding the determination year by the annual CPI-U for the year immediately preceding that year
STEP TWO: Divide the annual IPI for the year preceding the determination year by the annual IPI for the year immediately preceding that year
STEP THREE: Add the STEP ONE result and the STEP TWO result
STEP FOUR: Divide the STEP THREE result by two (2)
"CPI-U" means the Consumer Price Index for all Urban Consumers, U.S. city average, all items, using the index base period of 1982-84 equal to one hundred (100), as published by the Bureau of Labor Statistics of the United States Department of Labor. "IPI" means Indiana personal income. The computed rate increases must be rounded to the nearest cent ($0.01). The additional tax revenue collected from the Gasoline Tax and Special Fuel Tax rate increases would be distributed 53.5% to the State Highway Fund and 46.5% to local units of government. HB 1002 would change the distributions of Motor Carrier Surcharge Tax revenue by (a) reducing the distribution to the Motor Carrier Regulation Fund from 9% to 4.5% and (b) increasing distributions to the State Highway Fund and the Motor Vehicle Highway Account from 45.5% to 47.75% for both funds. The distribution change for revenue received from the Motor Carrier Surcharge Tax is expected to have no net annual impact on revenue to the Motor Carrier Regulation Fund, but would increase revenue to the State Highway Fund and the Motor Vehicle Highway Account. The three annual fuel tax rate increases would generate the following additional revenues:
Fiscal Year 2019
    $336.1 million more from the Gasoline Tax rate increase
    $131.8 million more from the Special Fuels Tax rate increase
    $100.0 million more from the Motor Carrier Surcharge Tax rate increase
Fiscal Year 2020
    $360.2 million more from the Gasoline Tax rate increase
    $144.8 million more from the Special Fuels Tax rate increase
    $107.9 million more from the Motor Carrier Surcharge Tax rate increase
Fiscal Year 2021
    $382.5 million more from the Gasoline Tax rate increase
    $157.5 million more from the Special Fuels Tax rate increase
    $115.4 million more from the Motor Carrier Surcharge Tax rate increase

TAXPAYER FRIENDLY EVALUATION. NOTE: The data and computations used for this Taxpayer Friendly evaluation can be found online at http://www.finplaneducation.net/indiana_personal_income.htm.

Effective the 2019 Fiscal Year, HB 1002 would increase the Gasoline Tax rate, the Special Fuel Tax rate, and the Motor Carrier Surcharge Tax rate each year based on an annual index factor - but, each of the three rate increases would be limited to $0.01 per gallon and the last annual rate increases would be for Fiscal Year 2025. The annual index factor would be computed using annual changes in the Consumer Price Index and Indiana Personal Income.

Annual percent changes in the Indiana Personal Income have been more than the annual percent changes in the Social Security Cost-Of-Living Adjustment in 19 of the 26 years 1990-2015 and 5 of the last 6 years 2010-2015. The Social Security Cost-Of-Living Adjustment was just 0.3% in 2016 and 2017. It would be Taxpayer UNfriendly to use Indiana Personal Income to help compute an annual index factor to increase fuel tax rates each year because the income of Social Security recipients is increasing significantly less than the income of other working Hoosiers - Hoosiers surviving on Social Security cannot afford to pay fuel tax increases based partly on overall Indiana Personal Income, which is increasing significantly more than Social Security Cost-Of-Living Adjustments.

Annual percent changes in the Indiana Personal Income have been more than the annual percent changes in the Consumer Price Index in 19 of the 26 years 1990-2015 and 8 of the last 10 years 2006-2015. It would be Taxpayer UNfriendly to use Indiana Personal Income to help compute an annual index factor to increase fuel tax rates each year because Indiana Personal Income is increasing significantly more than the rate of inflation - and it should not be assumed that the increasing costs of transportation infrastructure improvements must be more than the overall rate of inflation.

The effects of using the annual index factor in HB 1002 to increase the three fuel rates during Fiscal Years 2019 through 2025 can be estimated using actual pertinent data from the past seven Fiscal Years. The estimated Fiscal Year 2025 fuel tax rate increase from Fiscal Year 2018 would be (a) 50.4% more than the estimated inflation increase for the Gasoline Tax, (b) 61.3% more than the estimated inflation increase for the Special Fuel Tax, and (c) 100.0% more than the estimated inflation increase for the Motor Carrier Surcharge Tax. It is apparent that the annual index factor in HB 1002 that would be used to increase the fuel tax rates each year is actually a Taxpayer UNfriendly KEEP-YOUR-GOVERNMENT-FAT & HAPPY Index Factor that would provide additional revenues much in excess of overall Consumer Price Index inflation increases.

THE BOTTOM LINE: The Gasoline Tax, Special Fuel Tax, and Motor Carrier Surcharge Tax are true user fees in that the amount of money you pay as a driver is directly proportionate to the amount of fuel you consume, which is directly proportional to the amount of driving you do. It would be Taxpayer Neutral to increase the three fuel tax rates by $0.10 per gallon in Fiscal Year 2018 and eliminate the proposed subsequent annual rate increases using the Taxpayer UNfriendly annual index factor. The Indiana General Assembly could consider increasing the three fuel tax rates again in about 10 years when increased Gasoline Tax revenues have been offset by overall Consumer Price Index inflation increases.

HB 1002 Component #3. Alternative Fuel Decal Fees Increase

Effective the 2018 Fiscal Year, the alternative fuel decal fees would be increased by 50%. An estimated 400 alternative fuel decals are expected to be sold annually. Under the new fee amounts, this bill is expected to increase alternative fuel decal fee revenue by $46,500 each year, which would be distributed as follows: 53.5% to the State Highway Fund, 35.25% to local units of government through the Motor Vehicle Highway Account distribution formula, and 11.25% to the Local Road and Street Account.

TAXPAYER FRIENDLY EVALUATION. The owner of one of the following motor vehicles that is registered in Indiana and that is propelled by alternative fuel must obtain an alternative fuel decal for the motor vehicle and would pay an annual fee in accordance with the following schedule:
(a) annual fee increase from $100 to $150 for a passenger motor vehicle, truck, or bus, the declared gross weight of which is equal to or less than 9,000 pounds, that is owned by a public or private utility,
(b) annual fee increase from $100 to $150 for a recreational vehicle that is owned by a public or private utility,
(c) annual fee increase from $175 to $262.50 for a truck or bus, the declared gross weight of which is greater than 9,000 pounds but equal to or less than 11,000 pounds, that is owned by a public or private utility,
(d) annual fee increase from $250 to $375 for an alternative fuel delivery truck powered by alternative fuel, the declared gross weight of which is greater than 11,000 pounds,
(e) annual fee increase from $300 to $450 for a truck or bus, the declared gross weight of which is greater than 11,000 pounds, except an alternative fuel delivery truck,
(f) annual fee increase from $500 to $750 for a tractor designed to be used with a semitrailer.

Alternative fuel decal fees are NOT true user fees in that the amount of money paid is not directly proportional to the number of miles driven. However, the fees would not be paid by individual motorists. And most of these fees would be paid by the owners of trucks and buses, which cause disproportional damage to roads and bridges. For these reasons, the increases in the alternative fuel decal fees are Taxpayer Neutral.

HB 1002 Component #4. Transportation Infrastructure Improvement Fee

Effective January 1, 2018, a new $15 annual transportation infrastructure improvement fee would be established that applies to all Indiana motor vehicle registrations EXCEPT for motor vehicles with a declared gross weight that exceeds 26,000 pounds. HB 1002 would also impact vehicles registered through the International Registration Plan. In addition, HB 1002 would increase the registration fee for vehicles with weights greater than 26,000 pounds and divert 5% of the total registration fee to the Local Road and Bridge Matching Grant Fund (see HB 1002 component #5 below). Annually, there are approximately 5.7 million vehicles registered with the Indiana Bureau of Motor Vehicles and 365,000 registered with the Indiana Department of Revenue through the International Registration Plan. Revenue from the new transportation infrastructure improvement fee would be deposited in the Local Road and Bridge Matching Grant Fund. Increasing revenue available to the Local Road and Bridge Matching Grant Fund should increase grants made annually by the Indiana Department of Transportation. To the extent additional local units of government are approved for grants from the fund, local expenditures would increase to meet the match requirement for receiving fund grants. The fees are expected to generate approximately $92.1 million in annual revenue for the Local Road and Bridge Matching Grant Fund, with $49.5 M being received in Fiscal Year 2018. Additionally, the fees are expected  to have a net increase in Motor Vehicle Highway Account  funding of approximately $338,000 per year starting in Fiscal Year 2018.

TAXPAYER FRIENDLY EVALUATION. The proposed $15 annual transportation infrastructure improvement fee is Taxpayer UNfriendly. This new fee would NOT be a true user fee because the fee amount is not directly proportional to the number of miles driven. The $15 annual fee would be paid by the young pharmaceutical salesman residing in Carmel who earns $250,000 a year driving his brand new Lexus thousands of miles throughout Indiana. The same $15 annual fee would also be be paid by the elderly widow residing in Lebanon surviving on Social Security who drives her 1998 Olds 98 twice a week to the grocery store and church. The $15 annual transportation infrastructure improvement fee would actually be a regressive tax that adversely impacts lower income Hoosiers.

HB 1002 Component #5. Heavy Vehicles Annual Registration Fee Increase

Effective July 1, 2017, the annual fee to register a truck, a tractor used with a semitrailer, or a for-hire bus would be increased as follows:
$315 (from $300) for a declared gross weight greater than 26,000 pounds and equal to or less than 36,000 pounds
$529 (from $504) for a declared gross weight greater than 36,000 pounds and equal to or less than 48,000 pounds
$756 (from $720) for a declared gross weight greater than 48,000 pounds and equal to or less than 66,000 pounds
$1,008 (from $960) for a declared gross weight greater than 66,000 pounds and equal to or less than 78,000 pounds
$1,423 (from $1,356) for a declared gross weight greater than 78,000 pounds
NOTE: HB 1002 would also divert 5% of the total registration fee to the Local Road and Bridge Matching Grant Fund (see HB 1002 component #4 above).

TAXPAYER FRIENDLY EVALUATION. The heavy vehicles annual registration fee increases are Taxpayer Friendly because heavy vehicles cause a disproportionate share of damage to roads and bridges compared to lighter vehicles.

HB 1002 Component #6. Electric Vehicle Supplemental Registration Fee

Effective January 1, 2018, a person who registers an electric vehicle would be required to pay a supplemental annual registration fee of $150. This new supplemental registration fee would increase every five years beginning January 1, 2023, based on an index factor that would be computed like the annual index factor that would be used to annually increase the fuel tax rates (see HB 1002 Component #2 above). Revenue from this new fee would be deposited in the Local Road and Bridge Matching Grant Fund as follows:
Fiscal Year 2018 - $0.8 million
Fiscal Year 2019 - $2.0 million
Fiscal Year 2020 - $2.6 million
Fiscal Year 2021 - $3.2 million

TAXPAYER FRIENDLY EVALUATION. Owners of all motor vehicles must pay an annual Indiana registration fee. The 2017 annual Indiana registration fee for a passenger car is $21.35. In addition to the $21.35 annual registration fee, HB 1002 would require electrical vehicle owners to also pay an annual $150 supplemental registration fee starting January 1, 2018. The purpose of the new annual $150 supplemental registration fee would be to take the place of the Gasoline Tax that electric vehicle owners do not pay.

Electric vehicle owners should pay their “fair share” to help build and maintain the roadways and bridges that they use. The question is whether a flat $150 annual fee is an equitable fair share.

HB 1002 would increase the state's Gasoline Tax rate to $0.28 per gallon in Fiscal Year 2018. The U.S. Environmental Protection Agency reported November 1, 2016, that the average fuel economy of 2015 model-year vehicles was 24.8 miles per gallon. According to CarInsurance.com at http://www.carinsurance.com/Articles/average-miles-driven-per-year-by-state.aspx, the U.S. Department of Transportation Federal Highway Administration reports that 17,821 annual vehicle miles are driven per licensed driver in Indiana. Therefore, according to HB 1002, the average licensed Indiana driver would pay $201 in Gasoline Tax for Fiscal Year 2018 (17,821 miles / 24.8 miles per gallon = 719 gallons X $0.28 per gallon = $201).

From the standpoint of electric vehicle owners, some might contend that it is Taxpayer Friendly for electric vehicle owners to pay an annual $150 supplemental registration fee because this fee is less than the $201 in annual Gasoline Tax paid by the average licensed Indiana driver. However, the $150 supplemental registration fee is Taxpayer UNfriendly because the fee amount is NOT directly proportional to the number of miles driven. Also, it would be Taxpayer UNfriendly to increase the supplemental registration fee every five years because it is apparent that the annual index factor in HB 1002 that would be used to increase the fee is actually a Taxpayer UNfriendly KEEP-YOUR-GOVERNMENT-FAT & HAPPY Index Factor that would provide additional revenues much in excess of overall Consumer Price Index inflation increases: see http://www.finplaneducation.net/indiana_personal_income.htm.

THE BOTTOM LINE: The $150 annual electric vehicle supplemental registration fee would be Taxpayer Neutral if the proposed subsequent fee increases every five years were to be eliminated. The Indiana General Assembly could consider increasing the fee again in about 10 years at the same time when increased Gasoline Tax revenues under HB 1002 have been offset by overall Consumer Price Index inflation increases.

HB 1002 Component #7. Gasoline Use Tax Distribution Changes

The Gasoline Use Tax is a 7% sales tax on gasoline purchases made at the gas pump. Listed next by state Fiscal Year is how the Gasoline Use Tax revenues are distributed - the changes that would be made by HB 1002 are highlighted in bold blue.

Fiscal Year 2017: 14.286% deposited in the motor vehicle highway account, 85.714% deposited in the state general fund

Fiscal Year 2018: 14.286% deposited in the motor vehicle highway account, 21.429% deposited in the local road and bridge matching grant fund, 64.285% deposited in the state highway fund

Fiscal Year 2019: 14.286% deposited in the motor vehicle highway account, 21.429% deposited in the local road and bridge matching grant fund, 64.285% deposited in the state highway fund

Fiscal Year 2020: 14.286% deposited in the motor vehicle highway account, 21.429% deposited in the local road and bridge matching grant fund, 64.285% deposited in the state highway fund

Fiscal Year 2021 and thereafter: 14.286% deposited in the motor vehicle highway account, 21.429% deposited in the local road and bridge matching grant fund, 64.285% deposited in the state highway fund

These Gasoline Use Tax distribution changes would generate the following additional revenues for the State Highway Fund:
Fiscal Year 2018 - $275.1 million
Fiscal Year 2019 - $298.6 million
Fiscal Year 2020 - $331.4 million
Fiscal Year 2021 - $360.7 million

The Gasoline Use Tax distribution changes would also generate $30.6 million additional revenue for the Local Road and Bridge Matching Grant Fund in Fiscal Year 2018.

TAXPAYER FRIENDLY EVALUATION. It is Taxpayer Friendly that every sales tax dollar collected on gasoline sales should be immediately dedicated to the construction and maintenance of all the state’s roads and bridges.

Some legislators apparently are “concerned” that the Gasoline Use Tax distribution changes in HB 1002 would result in the state’s General Fund having $305.7 million less in Fiscal Year 2018, $298.7 million less in Fiscal Year 2019, $331.4 million less in Fiscal Year 2020, and $360.7 million less in Fiscal Year 2021. However, there are numerous ways to manage the proposed state General Fund revenue reductions without impacting the delivery of necessary services. For example, use of the Governor’s reversion authority to not spend unneeded state General Fund budgeted amounts has averaged $232.1 million the past six Fiscal Years from 2012 through 2017. Also, reducing the state's Fiscal Year 2017 total cash reserves of $1.73060 billion to the prudent Fiscal Year 2018 total state cash reserves of $1.55882 billion would free up $171.8 million for new General Fund spending in Fiscal Year 2018. (Supporting data is compiled at http://www.finplaneducation.net/state_reserves_history.htm.)

HB 1002 Component #8. Toll Roads

HB 1002 would remove the current statute requiring approval from the General Assembly to toll portions of certain interstates. The General Assembly must now enact a statute authorizing the Governor to (a) approve the location of a tollway on highway lanes that were in existence on July 1, 2011, and (b) impose tolls on motor vehicles for use of Interstate Highway 69 - exceptions include the Illiana Expressway connecting Interstate Highway 65 in northwestern Indiana with an interstate highway in Illinois and a project that is located within a metropolitan planning area that connects the state of Indiana with the commonwealth of Kentucky. 

The Indiana Department of Transportation (INDOT) would be required by HB 1002 to seek a Federal Highway Administration waiver to toll interstate highways. If INDOT successfully petitions the federal government for authorization to toll portions of interstates, state revenue could further increase from sections of the interstate where tolls are assessed. To the extent the federal government approves tolling in the state and depending on how tolling is performed, the state could receive additional revenue in future years. Increases in revenue are currently indeterminable.

In addition, HB 1002 would mandate that the first toll lanes established on an interstate highway must be located at least seventy-five (75) miles from an interstate highway or bridge on which travel is subject to tolling as of July 1, 2017. There would be a public comment period, and required replies to the public comments, for a toll road project by INDOT or a tollway project carried out using a public private partnership.

HB 1002 would also require the Indiana Department of Transportation (INDOT) to engage an outside consulting firm to conduct a feasibility study on tolling the interstate highways (including revenue projections based on an analysis of optimal tolling rates, vehicle counts and types by state of registration, and traffic diversion). A written report on the feasibility study would have to be delivered to the Funding Indiana's Roads for a Stronger Safer Tomorrow Task Force before November 1, 2017. The tolling feasibility study is expected to increase one-time INDOT expenditures in Fiscal Year 2017. The state of Wisconsin published a December 2016 tolling feasibility study that was performed by a third-party vendor. The reported costs for this study were $700,000. INDOT reports the cost of a tolling feasibility study could be between $200,000 and $500,000. Increases in INDOT expenditures for a tolling feasibility study would come from the State Highway Fund.

TAXPAYER FRIENDLY EVALUATION. HB 1002 would impose the following 39 tax and fee increases that would total $590.8 million in Fiscal Year 2018, $681.7 million in Fiscal Year 2019, $727.5 million in Fiscal Year 2020, and $770.8 million in Fiscal Year 2021:
(1) The Gasoline Tax rate would increase in Fiscal Year 2018 to $0.28 per gallon from $0.18 per gallon,
(2) The Gasoline Tax rate would likely increase in Fiscal Year 2019 to $0.29 per gallon,
(3) The Gasoline Tax rate would likely increase in Fiscal Year 2020 to $0.30 per gallon,
(4) The Gasoline Tax rate would likely increase in Fiscal Year 2021 to $0.31 per gallon,
(5) The Gasoline Tax rate would likely increase in Fiscal Year 2022 to $0.32 per gallon,
(6) The Gasoline Tax rate would likely increase in Fiscal Year 2023 to $0.33 per gallon,
(7) The Gasoline Tax rate would likely increase in Fiscal Year 2024 to $0.34 per gallon,
(8) The Gasoline Tax rate would likely increase in Fiscal Year 2025 to $0.35 per gallon,
(9) The Special Fuel Tax rate would increase in Fiscal Year 2018 to $0.26 per gallon from $0.16 per gallon,
(10) The Special Fuel Tax rate would likely increase in Fiscal Year 2019 to $0.27 per gallon,
(11) The Special Fuel Tax rate would likely increase in Fiscal Year 2020 to $0.28 per gallon,
(12) The Special Fuel Tax rate would likely increase in Fiscal Year 2021 to $0.29 per gallon,
(13) The Special Fuel Tax rate would likely increase in Fiscal Year 2022 to $0.30 per gallon,
(14) The Special Fuel Tax rate would likely increase in Fiscal Year 2023 to $0.31 per gallon,
(15) The Special Fuel Tax rate would likely increase in Fiscal Year 2024 to $0.32 per gallon,
(16) The Special Fuel Tax rate would likely increase in Fiscal Year 2025 to $0.33 per gallon,
(17) The Motor Carrier Surcharge Tax rate would increase in Fiscal Year 2018 to $0.21 per gallon from $0.11 per gallon,
(18) The Motor Carrier Surcharge Tax rate would likely increase in Fiscal Year 2019 to $0.22 per gallon,
(19) The Motor Carrier Surcharge Tax rate would likely increase in Fiscal Year 2020 to $0.23 per gallon,
(20) The Motor Carrier Surcharge Tax rate would likely increase in Fiscal Year 2021 to $0.24 per gallon,
(21) The Motor Carrier Surcharge Tax rate would likely increase in Fiscal Year 2022 to $0.25 per gallon,
(22) The Motor Carrier Surcharge Tax rate would likely increase in Fiscal Year 2023 to $0.26 per gallon,
(23) The Motor Carrier Surcharge Tax rate would likely increase in Fiscal Year 2024 to $0.27 per gallon,
(24) The Motor Carrier Surcharge Tax rate would likely increase in Fiscal Year 2025 to $0.28 per gallon,
(25) The Motor Carrier Surcharge Tax would have to be paid at the pump instead of through quarterly filings made with the Indiana Department of Revenue,
(26) The annual alternative fuel decal fee would increase to $150 from $100 for a passenger motor vehicle, truck, or bus, the declared gross weight of which is equal to or less than 9,000 pounds, that is owned by a public or private utility,
(27) The annual alternative fuel decal fee would increase to $150 from $100 for a recreational vehicle that is owned by a public or private utility,
(28) The annual alternative fuel decal fee would increase to $262.50 from $175 for a truck or bus, the declared gross weight of which is greater than 9,000 pounds but equal to or less than 11,000 pounds, that is owned by a public or private utility,
(29) The annual alternative fuel decal fee would increase to $375 from $250 for an alternative fuel delivery truck powered by alternative fuel, the declared gross weight of which is greater than 11,000 pounds,
(30) The annual alternative fuel decal fee would increase to $450 from $300 for a truck or bus, the declared gross weight of which is greater than 11,000 pounds, except an alternative fuel delivery truck,
(31) The annual alternative fuel decal fee would increase to $750 from $500 for a tractor designed to be used with a semitrailer,
(32) A new $15 annual transportation infrastructure improvement fee would be established that applies to all Indiana motor vehicle registrations except for motor vehicles with a declared gross weight that exceeds 26,000 pounds,
(33) The annual fee to register a truck, a tractor used with a semitrailer, or a for-hire bus with a declared gross weight greater than 26,000 pounds and equal to or less than 36,000 pounds would be increased to $315 from $300,
(34) The annual fee to register a truck, a tractor used with a semitrailer, or a for-hire bus with a declared gross weight greater than 36,000 pounds and equal to or less than 48,000 pounds would be increased to $529 from $504,
(35) The annual fee to register a truck, a tractor used with a semitrailer, or a for-hire bus with a declared gross weight greater than 48,000 pounds and equal to or less than 66,000 pounds would be increased to $756 from $720,
(36) The annual fee to register a truck, a tractor used with a semitrailer, or a for-hire bus with a declared gross weight greater than 66,000 pounds and equal to or less than 78,000 pounds would be increased to $1,008 from $960,
(37) The annual fee to register a truck, a tractor used with a semitrailer, or a for-hire bus with a declared gross weight greater than 78,000 pounds would be increased to $1,423 from $1,356,
(38) A person who registers an electric vehicle would be required to pay a new supplemental annual registration fee of $150, and
(39) The new $150 supplemental registration fee for electric vehicles would increase every five years beginning January 1, 2023, based on an index factor like that used to annually increase the fuel tax rates.

It is unconscionably Taxpayer UNfriendly to take any action whatsoever to establish new toll roads at the same time that 39 tax and fee increases are proposed to provide many hundreds of millions of dollars of additional revenue to fund state and local transportation infrastructure.

Also, the HB 1002 requirement that that the first toll lanes established on an interstate highway must be located at least 75 miles from an existing interstate highway or bridge on which travel is subject to tolling means that motorists would be enticed to congest local roads and bridges to avoid paying tolls in the 32 counties listed next.
I-64: Warrick, Gibson, Vanderburgh, Posey.
I-65: Tippecanoe (partial), Boone, Hendricks, Marion, Johnson, Shelby.
I-69: Vanderburgh, Warrick, Gibson, Pike, Daviess, Greene (partial), Monroe (partial), Morgan, Johnson, Marion, Hamilton, Madison, Delaware, Grant.
I-70: Wayne, Henry, Hancock, Marion, Hendricks, Morgan, Putnam, Clay, Vigo.
I-74: Dearborn, Ripley, Franklin, Decatur, Shelby, Marion, Hendricks, Boone, Montgomery, Fountain, Vermillion.
I-465: Marion, Hamilton.
I-865: Boone.

Furthermore, it is Taxpayer UNfriendly to take toll roads approval away from the General Assembly and give it solely to the Governor because it is more difficult for vested interests to use campaign contributions to “influence” 150 members of the General Assembly than it is to get toll roads approval from just the Governor.

Finally, it is also Taxpayer UNfriendly to take hundreds of thousands of dollars away from road funds to hire an outside consulting firm to conduct a Taxpayer UNfriendly feasibility study on tolling interstate highways.

HB 1002 Component #9. Additional INDOT Duties

Under HB 1002, the Indiana Department of Transportation (INDOT) would be charged with (a) studying transportation funding provided from a tax levied on vehicle miles traveled, (b) establishing state and local metrics to evaluate infrastructure needs, and (c) developing a state and local road and bridge prioritization system based on safety, congestion, environment, regional and state economic contribution, potential intermodal connectivity, and total cost of ownership. Requiring INDOT to institute the condition  and prioritization metrics, including the appointment of two economic professionals and engineers, is expected to be accomplished with existing resources and funding levels.

TAXPAYER FRIENDLY EVALUATION. Vehicle-miles travelled (VMT) fees are generally distance-based fees levied on a vehicle user for use of a roadway system. As opposed to tolls, which are facility specific and not necessarily levied strictly on a per-mile basis, these fees are based on the distance driven on a defined network of roadways. In a broad sense VMT fees' application is envisioned through the use of an onboard vehicle device to capture the distance driven by a vehicle through GPS or other technology and relate that to a method of charging, which could range from manual cash payment to automatic deduction for a prepaid customer account. In an ideal world, replacing all state fuel taxes and other related fees with a state VMT fee where heavier vehicles pay a higher rate than passenger cars MIGHT be Taxpayer Friendly IF a practical and reliable method is devised to accurately capture the Indiana miles driven by each motorist. Imposing state VMT fees in addition to increased state fuel taxes and other related fees would be Taxpayer UNfriendly. Considerable VMT fee information is available through the Federal Highway Administration web page at https://www.fhwa.dot.gov/ipd/revenue/road_pricing/defined/vmt.aspx.

If it can be accomplished using existing INDOT resources and funding levels, it would be Taxpayer Neutral to have INDOT study VMT fees, establish consistent methods to evaluate the condition of state and local roads and bridges, and develop a prioritization system to improve the state and local roads and bridges.

HB 1002 Component #10. Motor Carrier Civil Penalties Assessment Procedures

HB 1002 would amend the assessment procedures for motor carrier civil penalties under Indiana Code 9-20-18-14.5. The Indiana Department of Revenue's notice of proposed assessment under IC 6-8.1-5-1 would be presumptively valid. A person against whom a civil penalty is imposed under this section could protest the penalty and request an administrative hearing. If a hearing is requested, the department must hold an administrative hearing at which the person has an opportunity to present information as to why the civil penalty should not be assessed.

TAXPAYER FRIENDLY EVALUATION. Indiana Code 9-20-18-14.5 pertains to the civil penalties enforcing the size and weight regulation of motor vehicles. IC 6-8.1-5-1 pertains to procedures related to assessments made by the Indiana Department of Revenue when a person has not reported the proper amount of tax due. IC 9-20-18-14.5 currently provides that a civil penalty may be assessed against a person only after an administrative hearing has been conducted. HB 1002 would change this procedure so that the civil penalties must be paid unless the person requests an administrative hearing and presents information as to why the civil penalty should not be assessed. This HB 1002 procedural change is Taxpayer Neutral because it appears to be consistent with the procedures in place for most other civil penalties imposed by the state.

HB 1002 Component #11. Weigh-In-Motion Pilot Program

HB 1002 would establish the Weigh-In-Motion Pilot Program. The Indiana Department of Transportation (INDOT) reports that currently there are no estimated state costs to operate the Weigh-In-Motion Pilot Program included in HB 1002. The Pilot Program is expected to be provided by a third-party vendor, with INDOT, the Indiana State Police, and the Indiana Department of Revenue providing minimal staffing support. Any increases in workload are expected to be accomplished under current funding and resource levels.

TAXPAYER FRIENDLY EVALUATION. Truck size and weight are regulated using federal and state legislation and policies for the purposes of safety and infrastructure preservation. Data on the actual characteristics of the trucks using the transportation infrastructure (including weights, volumes, and configurations) are necessary for many applications, including design, research, maintenance, and preservation. Weigh-in-motion (WIM) systems are designed to capture and record axle weights and gross vehicle weights as vehicles drive over a measurement site. Unlike static scales, WIM systems are capable of measuring vehicles traveling at a reduced or normal traffic speed and do not require the vehicle to come to a stop. This makes the weighing process more efficient, and, in the case of commercial vehicles, allows for trucks under the weight limit to bypass static scales or inspection. A literature review focused on the development of WIM systems, concepts for measuring axle loads, the applications of WIM sensors for pavements, and recent advancements in bridge WIM systems can be found online at https://www.fhwa.dot.gov/publications/research/infrastructure/structures/ltbp/16024/16024.pdf.

HB 1002 Component #12. Local Road and Bridge Matching Grant Fund Changes

Effective July 1, 2017, HB 1002 would increase the grant award to local units of government from the Local Road and Bridge Matching Grant Fund from 100% to 400% of the amount the local government commits to a project approved by the Indiana Department of Transportation (INDOT). Any money a local government unit is authorized to use for a local road or bridge project would become eligible as a local match source for awards from the Local Road and Bridge Matching Grant Fund. These changes could increase annual Local Road and Bridge Matching Grant Fund expenditures to local units of government, depending on the decisions of INDOT administrators.

TAXPAYER FRIENDLY EVALUATION. Increasing awards to local government units from the Local Road and Bridge Matching Grant Fund – by decreasing the local match from 50/50 to 20/80 – would be Taxpayer Friendly IF the increased awards are NOT contingent on imposing the proposed new Taxpayer UNfriendly $15 annual transportation infrastructure improvement fee on all Indiana motor vehicles with a gross weight under 26,000 pounds. The increased annual Local Road and Bridge Matching Grant Fund revenues of about $92 million from the proposed $15 annual transportation infrastructure improvement fees could be obtained from several other sources that are Taxpayer Friendly. For example, the Local Road and Bridge Matching Grant Fund would get $122.3 million more in Fiscal Year 2018 revenue if the distribution of the sales tax on gasoline purchases is changed to 14.286% deposited in the Motor Vehicle Highway Account, 42.857% deposited in the Local Road and Bridge Matching Grant Fund, and 42.857% deposited in the State Highway Fund.

HB 1002 Component #13. Railroad Crossing Remediation Projects

Effective July 1, 2017, HB 1002 would permit the Indiana Department of Transportation (INDOT) to approve certain railroad crossing remediation projects, and would authorize the Indiana Finance Authority (IFA) to finance approved projects subject to a maximum annual debt service limit of $10,000,000. To be approved, a railroad crossing remediation project would have to be at a state highway and be at a stage of critical need. The IFA would be authorized to obtain bonds for railroad crossing remediation projects until Fiscal Year 2025. State expenditures could increase by a maximum of $10 million per year in future years to pay down the principal and interest on any bonds and notes secured during that time period for eligible projects. Actual expenditures will depend on the amount of financing secured by the IFA and interest rates on the bonds or notes. Repayment of bonds or notes secured for railroad crossing remediation projects could impact the State Highway Road Construction Improvement Fund, which receives a portion of the state Gasoline Tax revenue (about $62.2 million for Fiscal Year 2016).

TAXPAYER FRIENDLY EVALUATION. Issuing Indiana Finance Authority bonds the next seven years to improve state highway railroad crossings that are at a stage of critical need is Taxpayer Friendly - as long as the total annual bond debt service payments remain at a prudent amount.

HB 1002 Component #14. Gasoline Tax Distribution Changes

HB 1002 would change the off-the-top distribution of Gasoline Tax revenue deposited in the State Highway Road Construction Improvement Fund (SHRCIF) from a 11.11 percent distribution to a flat $70 million annual amount. This distribution change is expected to increase revenue to the SHRCIF, which would be used to make payments on bonds obtained for state highway railroad crossing remediation projects authorized under HB 1002 (see HB 1002 Component #13 above). 

HB 1002 would also remove off-the-top 5.56 percent distributions of gasoline tax revenue to both the State Highway Fund and local units of government through the Motor Vehicle Highway Account funding formula. Assuming the present distribution pattern of 75 percent to the Motor Vehicle Highway Account and 25 percent to the Highway Road & Street Fund (and a Gasoline Tax rate of $0.18 per gallon) will continue, these two distribution changes would result in the following negligible net Gasoline Tax distribution changes for Fiscal Year 2018: the State Highway Fund distribution would increase by $33.1 million instead of $31.0 million, the counties distribution would increase by $21.9 million instead of $21.1 million, and the cities and towns distribution would increase by $7.0 million instead of $9.9 million.

TAXPAYER FRIENDLY EVALUATION. It is Taxpayer Friendly that Gasoline Tax revenue would be used to make prudent payments on bonds obtained for state highway railroad crossing remediation projects. 

HB 1002 Component #15. Centralized Electronic Statewide Asset Management Database

Effective July 1, 2017, HB 1002 would appropriate $250,000 of Motor Vehicle Highway Account (MVHA) funds annually to the Indiana Department of Transportation for the Local Technical Assistance Program to develop and maintain a centralized electronic statewide asset management database. As a result, the State Highway Fund would receive approximately $133,000 less revenue from the MVHA and local units of government would receive approximately $117,000 less in local MVHA revenue per year.

TAXPAYER FRIENDLY EVALUATION. Developing and maintaining a centralized electronic statewide asset management database would be Taxpayer Friendly IF timely information and "what if" analyses are provided to help make cost-effective resource allocation decisions regarding the state’s transportation infrastructure. It will be interesting to see if there is significant “conflict” between the priorities developed from using the centralized electronic statewide asset management database and the allocation decisions included in the various county, city, and town asset management plans. Some Federal Highway Administration resources pertaining to transportation asset management are available online at https://www.fhwa.dot.gov/asset/.

HB 1002 Component #16. Transportation Funding Exchange Program Changes

Effective July 1, 2017, HB 1002 would make changes to the Transportation Funding Exchange Program between the state and counties and municipalities. The local government match requirement for participation in the Exchange Program would be 20%, which is currently the standard local match for the federal Surface Transportation Program (STP) funds that Indiana counties and municipalities most often apply for – it appears that the 20% match requirement would be more than the 10% match that federal law requires for the infrequently used Congestion Mitigation and Air Quality (CMAQ) and Highway Safety Improvement Program (HSIP) funds. The Indiana Department of Transportation (INDOT) will still have discretion in determining which projects get awarded federal funds through their normal call for projects procedure, but HB 1002 would make all projects that have been awarded federal funds eligible for the Exchange Program – to date, INDOT has only agreed to use the Exchange Program sparingly on a case by case basis. HB 1002 would also require INDOT to exchange 100% of the local share with state funding (instead of 75%). In addition, HB 1002 would set aside 25% of INDOT’s overall annual federal program for local projects funded with federal dollars. As a result, an estimated $249 million in State Highway Funds would be set aside for local fund swaps under HB 1002. The $249 million in set-aside funds does not necessarily represent a state expenditure increase as (a) local units will decide if they want to utilize the state funding swap, (b) local units are required to provide a 20% match of swapped funds, and (c) federal funds swapped for state funds could be utilized for state road projects with the state required to provide the 20% match required by the Federal Highway Administration. The maximum estimated State Highway Funds that would be used from the set-aside (after deducting the local match requirement) is approximately $200 million, with the state being required to expend approximately $49 million in State Highway Funds under the match to use the $249 million in federal funds.

TAXPAYER FRIENDLY EVALUATION. The HB 1002 changes to the Transportation Funding Exchange Program are Taxpayer Friendly from the standpoint of Indiana counties and municipalities.

Federal dollars enable Indiana counties and municipalities to complete road and bridge projects that would not be possible with only local funding. However, the federal process can add a significant amount of time and cost to a project. Currently, a federal aid project will take 2.5 to 4 years to develop while the same project using state or local funds can be designed and constructed in a year. The longer a project takes to develop and construct, the more it ends up costing due to inflation increases. Additionally, using state and local dollars for constructing local projects (in lieu of federal dollars) will allow the projects to be “right-sized” to meet local transportation needs rather than having to be designed to meet federal standards that might not be appropriate for local projects.

What makes the Transportation Funding Exchange Program changes in HB 1002 most appealing for local governments is the increased swap percentage from 75% to 100%. Previously, it didn’t always make sense for a local government to ask INDOT to swap out federal funds. Here is a hypothetical example illustrating why the increased swap percentage is an improvement. Say a county has a road and bridge project that is estimated to cost $1 million. The local match would be $200,000 and the federal share would be $800,000. Based on the current Exchange Program, if the county wanted to swap out the federal funds for state funds in order to accelerate the project delivery, the county would have to forfeit 25% ($200,000) of the $800,000 match. That means the total project cost would be reduced to $800,000 ($200,000 local plus $600,000 swapped funds). It is very difficult to engineer down the cost of a project, especially smaller local projects. With the proposed legislation in HB 1002, the county would be able to swap out the $800,000 of federal funds for $800,000 of state funds, and the total project budget would remain the same and the county could get the $1 million road and bridge project designed and constructed much more quickly.

HB 1002 Component #17. Motor Carrier Surcharge Tax Payment Change

HB 1002 would require the Motor Carrier Surcharge Tax to be paid at the pump instead of through quarterly filings made with the Indiana Department of Revenue (DOR). As a result, the state is expected to collect an additional $20 million annually from motor carriers, which includes $10 million in previously uncollected tax revenue and an additional $10 million from the tax rate increases contained in HB 1002. Because the Motor Carrier Surcharge Tax will be paid at the pump, individuals who operate personal diesel vehicles would also pay the Motor Carrier Surcharge Tax at diesel pumps in the state. However, these individuals would be eligible for annual refunds equal to $100 for each state-registered diesel vehicle. Additional refunds could be claimed if proof is provided that Motor Carrier Surcharge Taxes paid during the year exceed the $100 refund. Net revenue collections will depend on (a) nonresident personal vehicles that purchase diesel in the state but do not claim a refund from the DOR, (b) actual diesel fuel consumption for resident personal vehicles, (c) the extent to which owners of resident vehicles claim payments greater than the $100 amount, and (d) the extent to which the $100 annual payment is greater than actual taxes paid. Issuing refunds to individuals who use diesel vehicles for personal use would increase agency workload. Expenses of providing a refund to personal diesel vehicle owners would come from the state Motor Vehicle Highway Account.

TAXPAYER FRIENDLY EVALUATION. It is Taxpayer Friendly to have the Motor Carrier Surcharge Tax paid at the pump instead of through quarterly DOR filings if motor carriers will more accurately pay their fair share of fuel tax. It is unfortunate that individuals who operate personal diesel vehicles will have to go to the trouble of claiming a Motor Carrier Surcharge Tax refund from the DOR.

HB 1002 Component #18. Special Fuel Tax Study

HB 1002 would require the Indiana Department of Revenue (DOR) to study by September 1, 2017, gross retail tax collections on special fuel. Licensed special fuel suppliers and permissive suppliers must now file their monthly information reports and Special Fuel Tax payments with the DOR by the 15th day of each month. Tax-exempt persons who purchase special fuel and subsequently use the fuel in a taxable manner must now file quarterly reports and Special Fuel Tax payments with the DOR by the 15th day of the month following the end of the quarter. DOR workload increases would be expected to be accomplished with existing resource and funding levels.

TAXPAYER FRIENDLY EVALUATION. Using existing DOR resources to study Special Fuel Tax collections would be Taxpayer Friendly if the study results in the identification of practical methods for the owners of motor vehicles propelled by special fuel or natural gas products (CNB and LNG) to more accurately pay their fair share of fuel tax.

HB 1002 Component #19. Funding for Indiana's Roads for a Stronger Safer Tomorrow Task Force

HB 1002 would continue the Funding for Indiana's Roads for a Stronger Safer Tomorrow (FIRSST) Task Force through December 31, 2018. The Task Force must review and study funding for transportation infrastructure. The Task Force met five times during Calendar Year 2016 at a total cost of $10,000, but had an annual budget of $16,500. Depending on the number of meetings held by the Task Force, General Fund expenditures would be expected to increase by up to $16,500 per year for Fiscal Years  2018 and FY 2019.

TAXPAYER FRIENDLY EVALUATION. The Task Force members are:
(1) The chairperson of the house of representatives ways and means committee (Tim Brown).
(2) The chairperson of the senate appropriations committee (Luke Kenley).
(3) The chairperson of the senate tax and fiscal policy committee (Brandt Hershman).
(4) The chairperson of the house of representatives roads and transportation committee (Ed Soliday).
(5) The chairperson of the senate homeland security and transportation committee (Michael Crider).
(6) The director of the office of management and budget (Micah Vincent).
(7) The public finance director of the Indiana finance authority (Dan Huge).
(8) One member who represents counties and is appointed by the governor after considering the recommendation of the Association of Indiana Counties (Don G. Brewer, Orange County Commissioner).
(9) One member who represents municipalities and is appointed by the governor after considering the recommendation of the Indiana Association of Cities and Towns (Joseph E. McGuinness, prior Franklin Mayor and current INDOT Commissioner).
(10) One member appointed by the governor after considering the recommendation of the Build Indiana Council (Dennis Faulkenberg, Appian Advisors).
(11) One member appointed by the governor who is an employee of the Indiana department of transportation (Brandye Hendrickson, prior INDOT Commissioner).
(12) One member appointed by the governor who is a member of the Indiana Motor Truck Association (Michael E. Sodrel, Sodrel Truck Lines).
(13) One member appointed by the governor who represents taxpayers (Christopher D. Atkins, SAP Vice President - Digital Government Transformation).
(14) One member of the general assembly who is a member of the majority party of the house of representatives and is appointed by Brian Bosma, speaker of the house of representatives (Holli Sullivan).
(15) One member of the general assembly who is a member of the minority party of the house of representatives and is appointed by Brian Bosma, speaker of the house of representatives, in consultation with the minority leader of the house of representatives (Gregory Porter).
(16) One member of the general assembly who is a member of the minority party of the senate and is appointed by David Long, president pro tempore of the senate, in consultation with the minority leader of the senate (Karen Tallian).

Special note should be made that one Task Force member is appointed by the governor after considering the recommendation of the Build Indiana Council. See http://buildindianacouncil.org/boardofdirs.php to recognize that the Board of Directors for the Build Indiana Council consists of members from numerous businesses that have a vested interest in more public spending on the state’s transportation infrastructure. The Build Indiana Political Action Committee is the Build Indiana Council’s “collective method of supporting the campaigns of candidates who support our industry.” The 2016 state campaign contributions made by the Build Indiana Political Action Committee can be found online at http://campaignfinance.in.gov/PublicSite/Filings/Schedules/ViewExpenditureSchedule.aspx?FilingID=60152 and http://campaignfinance.in.gov/PublicSite/Filings/Schedules/ViewExpenditureSchedule.aspx?FilingID=60153.

Six of the eight Indiana General Assembly members on the Task Force benefited directly and indirectly from the following 2016 campaign contributions by the Build Indiana Political Action Committee:
Eric Holcomb for Indiana = $15,000
Committee To Elect Brian Bosma = $20,000
Citizens for Tim Brown = $12,000
Citizens for Crider = $500
Hershman For Senate = $7,500
Elect Luke Kenley = $7,500
David Long For State Senate = $11,500
Friends of Ed Soliday Committee = $12,000
Committee to Elect Holli Sullivan = $2,000
House Republican Campaign Committee = $38,000
Senate Majority Campaign Committee = $10,000
Indiana Republican State Committee = $15,000

The Task Force has considerable expertise regarding how to identify the state’s transportation infrastructure needs. However, the influence of the Build Indiana Political Action Committee tilts the Task Force outcomes in favor of the vested interests at the expense of taxpayers. For these reasons, continuing the Funding for Indiana's Roads for a Stronger Safer Tomorrow Task Force through December 31, 2018, is Taxpayer Neutral.

HB 1002 Component #20. Municipal Excise Surtax and Wheel Tax

Effective upon passage, HB 1002 would allow additional municipalities to institute Excise Surtax and Wheel Tax rates. The population for eligible municipalities to impose a Municipal Excise Surtax and Wheel Tax would be lowered to 5,000 from 10,000. An adopting municipality must adopt both taxes simultaneously. The Excise Surtax would be charged as a flat rate of between $7.50 and $25.00 on each vehicle registered in the municipality that is subject to the excise tax. The Wheel Tax would be assessed at a flat rate of between $5.00 and $40.00 on each vehicle registered in the municipality that is not subject to the excise tax.

Municipal Excise Surtax and Wheel Tax revenue may be used only for road and street construction and maintenance or matching funds to obtain a grant from the state Local Road and Bridge Matching Grant Fund. Wheel tax revenue may also be contributed to a multicounty infrastructure authority. There are 40 municipalities with a population between 5,000 and 10,000. If each of these municipalities were to adopt the Municipal Excise Surtax and Wheel Tax at maximum tax rates, municipal revenues could increase by as much as $9 million annually beginning in Calendar Year 2018. 

TAXPAYER FRIENDLY EVALUATION. This municipal Excise Surtax and Wheel Tax is NOT a true user fee because the fee amount is not directly proportional to the number of miles driven. Allowing additional municipalities to impose the Excise Surtax and Wheel Tax is Taxpayer UNfriendly because this regressive tax has a disproportionate adverse impact on lower income Hoosiers. Imposing the Excise Surtax and Wheel Tax in additional municipalities would be a significant burden on those who are trying to survive on Social Security incomes. The table below shows that Social Security cost-of-living adjustments are not keeping pace with inflation increases, and many Social Security recipients would be hard-pressed to pay an additional regressive Excise Surtax and Wheel Tax.

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This page was last updated on 05/04/17.