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Friday, July 25, 2014

Time to use all Indiana fuel taxes for roads

Sunday, July 29, 2012

INDIANAPOLIS -- Recent media reports about the difficulties facing state and local officials in adequately maintaining Indiana's system of roads and bridges have hit the mark. Tough choices must be made to reverse the trend of decreasing revenues in the face of increasing costs.

The facts are clear. Revenues received by counties from the state's fuel taxes have declined to levels not seen since 2000, while costs have continued to climb. Revenue options available to counties and other local units are in some cases already fully utilized and in other cases limited in their impact. While the state has been able to fund a healthy construction and maintenance program, financed through the lenses of the toll road, local governments have not seen similar cash infusions.

Fuel tax revenues are down because, due to higher fuel prices and more fuel-efficient vehicles, consumption is down. Local excise taxes are collected in 46 out of 92 counties and are based on vehicle registrations, which have also declined as auto purchases have slowed. Counties could also use some income tax dollars but those have similarly declined with the recession and are under increased demands for other parts of the budget.

Here are the sobering statistics for my area of the state. In Allen County and the surrounding nine counties, 40 major projects controlled by the state and local agencies are needed by 2025 for commercial development and traffic mitigation. Eight are needed. When it comes to regular maintenance the situation is even worse. Roads that should see major repair every 8-10 years will, under current revenue, only see repair every 16-30 years. This situation is not unique and is worse in other areas of the state.

The local sources of revenue are certainly part of a solution, but one action that can be taken when the legislature meets again is to use all of the fuel tax dollars for infrastructure. Under current law, the state diverts $144 million in fuel tax revenue that should be used for roads to the state police, BMV, and other programs. Local officials have administrative and public safety costs that are covered by the units' general funds and the state should do the same.

It is important that no more time be lost in finding a solution. The worse condition a road falls into the more expensive the repairs become. After nearly a decade of falling revenue, many rural roads, but also city streets, are teetering on the need for major repair. The decisions by some localities to close bridges or return roads to gravel reflect that dilemma. The fiscally responsible decision is to fix roads sooner rather than later when it becomes even more responsible.

Using all the fuel tax revenue for roads and bridges would not require a tax increase and would have an immediate impact. Most importantly this will allow local unites to begin work now, saving money in the future. It should also be remembered that quality roads save time, gas and even vehicle repair costs for everyone who lives, works and travels in Indiana. And good infrastructure is a major component of any job creation or economic development effort.

Let's not delay and be penny wise but pound-foolish. Working together, taxpayers, local and state officials should be diligent in insuring funding for our current and future infrastructure needs.