How the road funding plan will affect our district
Maintaining Hoosier highways and roads is a constant, ongoing obligation. Whatever the price of gas might be, potholes must be filled and roads must be maintained. If no action is taken in how we fund road construction and maintenance, we will all face mounting costs in terms of traffic congestion and road surface conditions. Already, the average Hoosier spends $366 per year in car repairs stemming from road quality. To address our current funding shortfalls and future needs, House Republicans proposed and passed House Bill (HB) 1001. This road funding bill was built upon three principles: fiscal responsibility, data-driven metrics and sustainable funding. All three are essential in maintaining a safe, efficient roads system to drive our economy; we do not want to create and leave a long-term debt for our children and our grandchildren in the form of crumbling and obsolete transportation infrastructure.
Indiana’s transportation infrastructure is primarily funded by a fixed gasoline tax of 18 cents per gallon, which was set in 2002. Since then, inflation has reduced the purchasing power of this funding source by over 25 percent. In the meantime, vehicles are using less gasoline, further reducing the revenue available to maintain our roads and bridges. Someone told me the other day that they paid 83 cents for gasoline at Kroger's after using their accumulated discounts. I asked, hypothetically, if gas at that price would withstand indexing the excise tax on gasoline by another 4 cents per gallon. The person said, "It’s not a problem now, but when gas is $4 per gallon, it will be." I truly understand these concerns.
Probably the most difficult part of the bill is a $1 per pack increase in the cigarette tax. The new money raised would go to the Medicaid fund with the assumption that most smokers either use the Medicaid program or contribute disproportionally towards the state’s health care costs. We’re generating this additional revenue because the bill moves most of the revenue from the sales tax on gas from the General Fund to the Motor Vehicle Highway Account. The increased tax on cigarettes covers that budgetary shift.
Twenty-four percent of Hoosiers smoke and will pay the tax. Smoking habits tend to follow income levels, and District 23 is considered a lower income part of the state. Logic tells me that my constituents will pay a higher percentage of the funding than higher income parts of the state. Also, our region will likely receive a lower portion of the funds raised for highway maintenance. The conundrum created is that lower income folks will pay a regressive tax that makes life more difficult for them. I'm not a smoker, but I have some empathy for them as we raise taxes. On the other hand, we are tying road funding closer to those that drive through the gas tax and sales tax on gas, while aligning tobacco-related health care costs with a higher cigarette tax.
HB 1001 includes other funding mechanisms as well. Whereas only counties can levy wheel taxes to support local roads, our bill extends this ability to cities of 20,000 or more residents. This could complement already existing county revenues and funds. We also assist local governments with other tools, such as asset management plans and state matching grants.
In addition to looking at infrastructure funding options, many of our committees met to discuss legislation. The House Committee on Environmental Affairs acted on a bill that says the state can't enact rules or laws more stringent than the federal government. The bill's author wants to ensure that the Indiana Department of Environmental Management does not become more burdensome in the regulatory process thereby having a negative effect on business and industry. This bill passed out of the House and will now be considered by the Senate.
The House Committee on Agriculture and Rural Development passed out legislation that would require restaurants to ONLY serve inspected poultry. How is this even a question? There are exemptions, both state and federal, that would allow some uninspected poultry to be served by certain restaurants. The committee determined that public health cannot be risked for the sake of exemptions and passed this legislation out of committee. After being heard and passed by the House, this bill will now be considered by the Senate.
Finally, Ann and I will be celebrating 41 years of marriage on Feb. 8. It’s hard to believe that the time has gone so quickly. I'm thinking this one just might last!
More later,
WCF
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Rep. Bill Friend represents portions of Cass, Fulton and Miami counties.
He also serves as Speaker Pro Tempore.
