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Monday, May 2, 2016

Road funding options discussed

Tuesday, September 28, 2010

Indiana Local Technical Assistance Program (LTAP) Research Manager Neal Carboneau discussed the trending of fuel consumption and costs of highway department operations during his presentation at the monthly meeting of the Clay County Chamber of Commerce Tuesday. Jason Jacobs Photo. [Order this photo]
Multiple options are available for local governments to create additional funding for roads.

On Tuesday, the Clay County Chamber of Commerce welcomed Indiana Local Technical Assistance Program (LTAP) Research Manager (located on the Purdue University campus) Neal Carboneau to speak about road and highway funding.

"Occasionally, I and other elected officials receive comments that the streets are bad," Clay County Council President Mike McCullough said prior to introducing Carboneau. "This is something which affects everyone, which is why we invited Neal so we can get a better understanding on how funding for roads and highways work. The state has so many restrictions on funding, and it is important to note that no property tax dollars go to roads."

Carboneau explained the gas tax is where the majority of Local Road and Street and Motor Vehicle Highway Fund dollars come from.

"In 2003, the state increased the tax to 18 cents per gallon, which is a fixed rate," he said. "That is one misconception out there because many people think that when the cost of fuel goes up, so does the tax. However, it is the same 18 cents whether gas at the pumps is $2 a gallon or $4."

He added combination of the gas tax and special fuel (Diesel) tax of 16 cents per gallon account for 71.9 percent of the revenue into the Motor Vehicle Highway (MVH) Account.

Despite a higher population and more cars on the road, fuel use per mile has dropped since 1970, creating reduced revenue for highway departments in recent years.

"The increase of costs and expenses is also compounding the problem," Carboneau said. "Some departments are even reporting they are near the same revenue amount they received in 2000 or 2001, which was before the most recent increase in the gas tax."

Carboneau said there are reasons other than the increased cost of gas which have contributed to fewer gallons being purchased.

"In recent years, there has been the effort to increase fuel efficiency, and there are also more hybrid vehicles on the road, which require fuel less frequently," he said.

Carboneau also presented other potential sources of funding which could be used on local roads, including the Local Option Highway User Tax (LOHUT or Wheel Tax).

"This is the only local option tax specifically for road funding," Carboneau said. "If the gross weight of the vehicle is more than 11,000 pounds, it is a wheel tax, and it is considered a surtax if the weight is less than that amount."

Currently 47 of Indiana's 92 counties are utilizing a LOHUT, including all the counties neighboring Clay.

"It is up to each individual county to determine the rate of the tax, as well as the vehicle classifications," Carboneau said. "Depending on the rate scale, the LOHUT could create anywhere between $200,000 and about $800,000 in road funding."

While the county council would be responsible for instituting the tax, if they chose, the funding would be split among all the cities and towns as well.

"Other than an administrative fee collected by the Bureau of Motor Vehicles, all of the funding would stay in the county," Carboneau said, adding there is a formula in place to determine how the funding would be distributed. "However, there are other options, including grants, loans, bonds and cumulative capital development funds, which can create additional revenue for road and highway work."

Carboneau said the passage of a LOHUT would not affect current revenue streams and he addressed a question regarding how much additional funding could be created if the gas tax were increased.

"If the state increased the gas tax by one penny, it would create approximately $30 million in additional dollars for the MVH Fund," he said.

He added the deadline for instituting the LOHUT is July 1 of each year, meaning in order to begin receiving the additional funding in 2012, the tax would have to be approved no later than July 1, 2011, as the deadline has already passed for a potential effect in 2011.

"None of us are jumping up and down to pass a new tax," McCullough said. "But we can't depend on Indianapolis and the legislature to do it for us, so if we want to see major improvements to our roads, we have to look into doing something and take action ourselves."

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So, we are driving less miles in vehicles that get better fuel mileage so now we don't have the money to keep the roads (and streets) in good repair.

The State can raise the fuel tax and we can "pay at the pump" or we can pay at the BMV with the LOHUT but we are going to end up paying for better roads if we are going to have better roads.

Looking at the Clay County Budget, filed with the DLGF, there is about $2,702,055 coming into the county, including the budgets of the civil towns, the county itself, and the City of Brazil, listed as for local streets and roads or motor vehicle highway funding. The town of Harmony, for which there was no data, and a tax levy listed for the City of Brazil in the amount of $57,867, which apparently comes from property taxation, is not included in that figure. It is my understanding that that amount is not just for upkeep, but also for everything the County Highway Department or the street departments do. Given the amount of road we have, it is not a lot of money when you consider that paving a mile of road costs about $100,000.

The cost of everything keeps going up, but if you are careful you can still get what you pay for.

I don't know about you, but there are roads and streets that I avoid driving on because they are in bad shape and it just plain hurts me to bounce down them.

-- Posted by Leo L. Southworth on Wed, Sep 29, 2010, at 1:57 AM

Just to be clear, the above pertains to the 2010 budgets.

-- Posted by Leo L. Southworth on Wed, Sep 29, 2010, at 1:58 AM

"Occasionally, I and other elected officials receive comments that the streets are bad," Clay County Council President Mike McCullough said."

WOW is that an understatement....

-- Posted by BackHomeAgain on Wed, Sep 29, 2010, at 9:19 AM

BackHomeAgain: I was in attendance at yesterdays program and when Mr. McCullough made that comment he did it "tongue in cheek" with a chuckle from the audience knowing that they hear complaints probably on a daily basis. It was a very informative presentation by Mr. Carboneau.

-- Posted by open minded on Wed, Sep 29, 2010, at 9:54 AM

Great! The Wheel Tax Rat Hole *FINALLY* crawls its way into Clay County. Wonderful! Now I'll pay and they'll fix and then they'll say they need more, they'll raise. Can you hear it? The clinkety-clink of all that money draining down the rat hole?

No! My income has fallen off and I am asked at work to do more for less. Now, the county wants to gouge me? Forget it! Government DOES NOT HAVE A RIGHT TO STEAL MORE MONEY FROM ME!

Just say no to higher fleecing, I mean, taxes.

-- Posted by TheRider on Tue, Oct 5, 2010, at 1:40 PM

You want a tax plan for Clay County? Here is one:

Drop the property tax to almost nothing.

Lower all taxes to the absolute bare minimum.

Abolish all the permits and worthless licenses, business, construction and otherwise.

Then watch what happens. You'll see business and people moving in. And you'll see neighboring counties screaming, "You're robbing us!" Because we will be. Businesses and People are looking for a cheap place to land. People are hurting and they're broke. Now our local government needs more money so they simply raise taxes? Its an insult. Government never shrinks. It just grows and grows.

I know, the above is unheard of because government always wants to grow. But, it doesn't have to.

If government and government officials were not so short sighted, they'd realize that this price fixing scheme among counties does not have to be adhered to. There is no better way to uselessly waste money than to give it to your government.

Hear this county council: I Do Not Consent.

Take some salary reductions like I've had to. Take some lay offs like many of us have.

-- Posted by TheRider on Tue, Oct 5, 2010, at 2:20 PM

TheRider, I have a question for you. Without the ability to raise funds through taxation, how do you propose to fund services demanded of government? Do you propose that everyone form coalitions of neighbors to build roads to their homes and pay for it themselves? How about a toll system with a payment at every house, just stop and drop a penny or two in the mailbox on the honor system?

I probably hate taxation as much as anyone else and I don't like to see tax dollars used in ways that are not the most cost-effective way to meet the requirements of service to the public or on "pork" projects that do nothing to contribute to the standard of living. However, the vast majority of tax dollars provide goods and services demanded by the public and are spent cost effectively.

Think of your statement. Would anyone really want to live here without what taxation pays for?

-- Posted by Leo L. Southworth on Fri, Oct 8, 2010, at 2:27 AM

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