Thank you to everyone who returned my legislative survey. It is very helpful to have input from constituents on major issues. Most comments overwhelmingly asked where the Hoosier Lottery money is being spent in relation to a proposed gas tax increase to fund roads. Many added that the lottery was initially pitched to Indiana as a financial benefit for roads and education. Here is a breakdown of how lottery funds are actually used.
First, the prize costs and the expenses of the state lottery have to be covered. In 2016, excess revenue totaled roughly $290 million. This is distributed into the Indiana State Teachers’ Retirement Fund, the Pension Relief Fund and the Build Indiana Fund.
The Indiana State Teachers’ Retirement Fund and the Pension Relief Fund each receive about 10 percent of the excess revenue. This amount equals about $30 million annually and goes toward addressing shortfalls in the teacher, police officer and firefighter pension systems. The remaining 80 percent of the total excess revenue goes to the Build Indiana Fund.
Once distributed to the Build Indiana Fund, over 90 percent of the money goes to the Motor Vehicle Excise Tax Replacement Account. In 1996, the General Assembly cut the vehicle excise tax in half and used this lottery-supported account to replace the revenue lost by county governments. Distributed by the state auditor to the counties, they can then use these replacement funds for any purpose, such as local road and bridge repairs and public safety improvements. In 2016, $236 million was sent to local governments through the fund. The remaining balance, roughly 10 percent, remains deposited in the Build Indiana Fund, which supports a variety of technology projects throughout the state, including improving local school and library internet connectivity.
While the lottery money is a lot for pensions, local governments and statewide technology projects, it is not nearly enough to fund the additional $1.2 billion needed to maintain our roads and bridges throughout the state.
The lottery was never intended to provide a dedicated, ongoing revenue source for roads. Instead, money for roads comes from – and should come from – dedicated funding sources, such as user fees, like the gasoline or special fuel (diesel) tax. Unfortunately, we simply have not updated our fuel user fees for over a decade to keep up with inflation, improved mileage efficiency and electric cars. I believe the user fee increases proposed in House Bill 1002 are currently the best responsible options for addressing our current and future road funding needs. For example, it includes an annual registration fee for electric cars, which will only grow in number, equal to what the average motorist pays annually in fuel taxes and other user fees.
It’s only fair we restore the principle that those who use our roads also pay for our roads. We should remember, that under our proposal non-Hoosiers and out-of-state companies will contribute a substantial portion of the revenue. It’s not fair that Hoosiers pay full freight for road maintenance while the rest of the country gets to enjoy the Crossroads of America.
I hope this clears up some confusion, but I encourage you to contact me with any more questions you may have regarding the lottery, road funding or other legislation this session. I can be reached at 317-232-9981 or h23@iga.in.gov. Remember, it’s your state government.
More later,
Bill
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Rep. Bill Friend (R-Macy) represents House District 23,
which includes portions of Cass, Fulton and Miami counties.
A high-resolution photo of Friend can be downloaded by clicking here.
