Road funding in Bartholomew County is still taking a nose dive.
Indiana residents were told in 2017 that a 10 cent-per-gallon gas tax increase, as well as an additional $15 placed on the vehicle registration fee, would raise about $1.2 billion annually to repair state, county and local roads.
But it now appears Bartholomew County will have less money for road work in 2020 than it did before the gas tax increase went into effect, county highway engineer Danny Hollander said.
While the increased revenue provided $4.2 million in road funding for Bartholomew County government in 2018, Hollander was given a revised mid-summer revenue forecast that warned him to expect only $3.8 million in 2019. That forecast came several months after the department created a $4.1 million spending plan for this year.
“So roughly, we were told in the middle of the year that we have to cut $300,000 out of (the 2019) budget,” Hollander told the Bartholomew County Council during their recent work session.
Things got worse when he was told projected road money for next year is expected to drop to $3.6 million in Bartholomew County.
The 2020 projected revenue is still a half million dollars more than Bartholomew County received just prior to the tax increase.
“But we’re not even getting what we were receiving before (the gas tax hike),” Hollander said.
Prior to the hike, the Bartholomew County Commissioners had provided a half-million dollars for road work annually from their economic development income tax (EDIT) revenue, the engineer said. Most of the EDIT money has already been earmarked in 2020 for other projects, Hollander said.
In addition, both inflation and the law of supply and demand are working against the county highway department, Hollander said.
If substantially higher costs for aluminum, steel and asphalt are taken into consideration, Bartholomew County has less money to pay contractors, he said. The limited number of available contractors also have their hands full with more lucrative work from the private sector and the Indiana Department of Transportation (INDOT), he said.
“Those contractors don’t even want to mess with my low (paying) jobs,” said Hollander, who added that higher material prices are also being motivated by a fear of new tariffs. “I don’t see things getting any better.”
Hollander told elected officials about the projected drop in road funding in July.
But after meeting with Purdue Extension experts and local legislators, Hollander says he now understands the two most significant reasons for the lower funding.
One is a little-noticed provision added to an existing bill that was passed early this year by the Indiana General Assembly, he said.
Under that provision, INDOT saw its share of gas tax revenue increase from 53% to 60%, while money set aside for local roadwork dropped from 47% to 40%, Hollander said.
Another key reason is the growing popularity of fuel-efficient vehicles, including hybrids. Hollander said gasoline consumption in Indiana has fallen, which results in less money being collected through the gas tax.
While assuring the county council that road funding is “going to be all right” for now, Hollander also said he has returned to the practice of reshuffling money to pay departmental obligations.
That includes dividing a $407,000 state matching grant awarded last spring into two separate highway funds, he said. It also includes allowing regular road money to temporarily pay for the already-completed Southern Crossing upgrade. The highway engineer says he’s optimistic those funds will be replenished with grant money at a later date.
The county was awarded $591,796 this week through the Community Crossing matching grant program administered through INDOT. Hollander said the money won’t become available until April of next year.
Another example of reshuffling involves postponing $105,000 worth of repairs to a bridge along County Road 945N, northeast of Hope over Little Haw Creek. The money from the Cumulative Bridge Fund earmarked for that project will instead be used for repave up to 500 feet of roads leading up to bridges — and reduce the amount of money required from overlay funds for repaving roads, he said.
Another financial hurdle is increased prices for steel and aluminum, which appears to be caused in part by a fear of rising tariffs, Hollander said.
In order to further save additional funds, county highway crews are also doing an increasing amount of road work themselves, rather than hiring it out to contractors, Hollander said.
