Bacon: Where does the money from the Hoosier Lottery go?

Posted by: Hannah Carlock  | Thursday, March 2, 2017 9:25 am

Each year before the start of the legislative session, surveys are mailed to households throughout our community. Responses help guide me as I vote on important issues facing the state. This year, respondents submitted comments about the Hoosier Lottery, asking where the money goes and why it can’t be used to fund projects like road improvements. While the Hoosier Lottery is a revenue source for the state, the money generated is strictly accounted for and depended upon by various groups.

Our neighbors in Illinois actually delayed payouts to winners due to budgetary shortfalls, but Indiana first pays its winners. After payouts and expenses are covered, excess revenue is distributed into three funds, including the Indiana State Teachers’ Retirement Fund, the Pension Relief Fund and the Build Indiana Fund.

Last year, excess lottery revenue totaled nearly $290 million. From this, the Indiana State Teacher’s Retirement Fund and the Pension Relief Fund each received about 10 percent, or about $30 million. These funds are dedicated to teacher, police officer and firefighter pension systems. The remaining 80 percent of the excess revenue is then placed in the Build Indiana Fund, which supports a variety of technology projects, including improving internet connectivity for communities, schools and libraries. The Build Indiana Fund also supports the Motor Vehicle Excise Tax Replacement Account.

This account is vital for our communities. Each year, the state auditor distributes funds from this account to counties throughout out the state, which then uses the money at their discretion, including for local road and bridge repairs and public safety.

As lawmakers work to find a revenue source to fund the additional $1.2 billion needed, on average, each year to pay for maintaining the infrastructure we have while trying to invest in our future, some have asked why the Hoosier Lottery money can’t be dedicated to this effort.

First, I do not believe in taking from one pot to fill another. The money from the Hoosier Lottery is accounted for and pensioners and local governments depend on the funds they receive.

Second, revenue from the Hoosier Lottery is not stable. This fluctuation in a revenue source could result in continuous shortfalls. Job creators and investors need stability when considering where to locate.

Third, House Republicans have crafted a conservative plan to reform the way we fund our infrastructure needs. Under this plan, those who use our infrastructure will pay more.  House Bill 1002 would increase user fees by 10 cents per gallon on gasoline, special fuel and motor carrier surcharge taxes to restore buying power lost to inflation. The gasoline tax has not been increased since 2003 and the other fees haven't been increased since 1988. The bill would also shift the remaining 4.5 cents of the sales tax on gasoline immediately from the state's general fund to the State Highway Fund dedicated solely to roads and bridges. This means all taxes paid at the pump would be dedicated to funding road and bridge improvements for the first time in Indiana's history.

The bill would also implement a new $15 annual fee on all vehicles and a $150 annual fee on all electric vehicles registered in Indiana. The money would provide a sustainable source of funding for Indiana's Community Crossings Matching Grant Fund, which provides road funding to local governments. Altogether, the average Hoosier motorist would pay about $5 more per month under this proposal. If passed, House Bill 1002 would also require the Indiana Department of Transportation to study tolling and submit a waiver to the federal government that would allow Indiana's executive branch to approve tolling on existing interstates.

Indiana is a state that doesn’t spend more than we take in. We are dedicated to fiscal responsibility and conservative principles, which has fostered a business climate that helps employers grow and hire more Hoosiers. We can continue down the path to success if we remain diligent with our finances. Most of us understand that our infrastructure needs to be improved, and how we pay for this is continuously debated. I’m sure many readers also have ideas, which can be shared with me by calling 317-232-9833 or emailing h75@iga.in.gov.

 

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State Rep. Ron Bacon (R-Chandler) represents House District 75,
which includes portions of Warrick, Pike and Spencer counties.

A high-resolution photo of Bacon can be downloaded by clicking here.