A higher gas tax, a new vehicle registration fee and tolls on Indiana highways are all on the list of possibilities to bring another $1 billion of road funding into the state each year.
As lawmakers debate and discuss each option, the state’s new governor wants to continue hearing from residents on what options they like — or don’t like.
But Gov. Eric Holcomb doesn’t see the solution in one measure or another. He thinks the additional funding likely will come in the form of several different ideas.
The trick will be finding the right combination of each, he said.
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“There are multiple options. The only one that I’ve taken off the table is to do nothing. So none of the above doesn’t work for me. All of the above (are) still on the table. But I see them as all dials that we’re either going to dial up or down, and they’re all related,” Holcomb said.
Holcomb said he doesn’t have a strong preference on which combination legislators choose.
“I want to solve the problem. And so, I’m agnostic about how, but I want to make sure when we arrive at the final decision we get it right,” Holcomb said.
He isn’t in favor of a proposal to charge tolls on existing highways or interstates, or ones that are already built with tax dollars, such as Interstate 69, he said.
But he is more open to tolling added lanes or bridges. For example, he would consider tolling a new bridge over the Ohio River, like the state did in Jeffersonville. Drivers are saving time by using the bridge, and the state is collecting money from drivers who live in nearby states to help pay for roads that are used by travelers from all over, he said.
“We sit in the center of the country, we have a lot of cross traffic. We are the crossroads of America, and so if we can get others to help pay for our roads, I’m leaving that on the table as well,” Holcomb said.
Another option is increasing the gas tax, which is currently 18 cents per gallon. Lawmakers are considering a proposal that would have a one-time increase of up to 10 cents per gallon, and then an annual increase after of up to 1 cent per gallon.
Holcomb said he is currently undecided about the gas tax, but he thinks that idea is a credible and serious start to the discussion, since it is sustainable long-term. Looking long-term is key for the state, especially since infrastructure is a key part of economic development, he said.
“We’re a very attractive plot of land. But if we’re going to take advantage of one of our biggest gifts, and that’s our location, then we better have the infrastructure in place to back it up. Because the competition’s fierce,” Holcomb said.
He also is interested in the idea of public-private partnerships for new projects, similar to the partnership under former Gov. Mitch Daniels that leased the Indiana Toll Road in northern Indiana to a private company for 75 years, bringing in $3.8 billion to the state for road projects — money that has been stretched out for years. Because Indiana has experience with that type of partnership, and because all of the money gained from it went to roads, Holcomb said he feels more knowledgeable and more able to sell a similar project if it comes up, he said.
His goal now is to find out what residents think, he said. That will be an important task for his office and for state lawmakers who will be approving the final plan, he said.
“What do you, Joe and Jane taxpayer, favor? Doing nothing, doing something. And so I’ll hear from constituents now, while we’re in session, while we are debating this, and continue to inform myself about what’s on the public’s mind as well as equipping myself with the facts of, well, we need another billion dollars,” Holcomb said.
“I still have everything on the table. We meet regularly with leaders and members and the General Assembly to discuss what they’re hearing in their town hall meetings, and many of them, are, as I appreciate, doing the same. And we’ll compare notes and have a plan as the session unfolds. There’s a lot of cooks in the kitchen.”
And once the session is over, Holcomb will be looking to a familiar face to prioritize how those new dollars are spent: new Indiana Department of Transportation Commissioner Joe McGuinness.
McGuinness has testified to legislative committees about the need for more funding for roads, but his focus is not on where that money comes from, he said.
Instead, he will be working to develop a plan for how that money should be spent, he said.
“My role is not to choose the option. I speak on the state’s behalf, the state’s needs,” McGuinness said.
“What are the needs, and how do we fund it?”
That will include work to major roads, such as U.S. 31 and interstates, but also projects in communities across the state. He will be looking at how the new money would impact current project timelines, and if projects could be completed sooner with the new money available, he said.
One of the key areas is preserving the state’s infrastructure, including roads and bridges. The state maintains 5,600 bridges throughout Indiana, and about 45 percent are nearing 50 years old, out of a 75-year life expectancy, McGuinness said. Over those 50 years, the bridges have been repaired, but at some point, they will have to be replaced, he said.
Another key issue will be preparing for the future, and what transportation will look like in 20 years, he said.
That could include autonomous vehicles, or ones that are self-driven, more electric vehicles and more mass transit, he said.
For McGuinness, a fun part of his new job is looking at new technology and what could be coming in the future, he said.
“We are putting together multiple industries, what is this going to look like, what do we need to prepare for,” he said.
Here is a look at what state lawmakers are considering to bring in more money for road funding:
Gas tax increase
A one-time increase of up to 10 cents per gallon, with an annual increase of up to 1 cent per gallon
An added $15 fee when Hoosiers register their vehicles each year with the Indiana Bureau of Motor Vehicles
Electric vehicle fee
A $150 registration fee on electric vehicles that could increase every five years
The state would seek a federal waiver to collect tolls on interstates