If you’ve driven in Indiana lately, chances are you have dodged potholes or paid for an expensive car repair. In fact, the average Hoosier driver spends about $491 per year on repairs due to the condition of our roads. Indiana communities are grappling with traffic congestion, backlogged road projects and the growing costs of deferred maintenance. It’s abundantly clear we must renew our commitment to maintaining our reputation as the “Crossroads of America.”
Under strong Republican leadership, the 2017 legislative session saw the passage of a comprehensive, responsible and sustainable plan to fund our roads and bridges for the next 20 years. The new law constitutes the largest investment in infrastructure in Hoosier history. It will provide immediate and substantial funding increases for state and local roads, and it does so by restoring the user pays principle and requiring all taxes paid at the pump to go exclusively to roads and bridges.
From local streets to major interstates, few public investments are as important to our daily lives as roadways. If allowed to become unsafe and congested, they imperil everyone, from commuters to schoolchildren.
Safe roadways are also essential to the agricultural, manufacturing and logistics sectors of our economy. Indiana has more miles of interstate per square mile than any other state, allowing Hoosier companies to ship their goods to 80 percent of the U.S. within 24 hours. This is a competitive advantage that cannot be overstated.
Years of balanced budgets and fiscal responsibility under Republican leadership set the stage for this historic investment. Failure to fund and improve our roads would have caused the state’s cost of living and cost of doing business to increase, while our quality of life would have declined. Indiana would be facing less growth, fewer jobs and reduced opportunity. As Indiana’s top legislative leaders, we agreed that scenario was unacceptable.
Last year, a bi-partisan legislative task force determined Indiana’s roads required an average of $1.2 billion per year in additional funding over the next 20 years. Shifting the tax burden to non-drivers or future generations through bonding weren’t acceptable options. Raiding our state’s reserves would have been shortsighted and irresponsible. Instead, we focused on a conservative, data-driven approach, where those who use the roadways, whether they are Hoosiers or out-of-state drivers, contribute toward their upkeep.
Our constituents made it clear if taxes were increased, the revenue should be directed exclusively to roads. We answered their call. First, we increased our existing user fee schedule of fuel taxes: the gas tax, untouched since 2003, and the diesel tax, last adjusted in 1988, will both increase 10 cents. Second, over the next seven years, we will shift all sales tax revenue on gas to roads. By 2025, every cent of state taxes paid at the pump will fund roads and bridges. The new law also implements reasonable vehicle registration fees on hybrid and electric vehicles that pay little or no fuel taxes. And, finally, with so many out-of-state drivers and trucks using our roads, our plan requires the Indiana Department of Transportation to study tolling interstates. From there, the governor and State Budget Committee would approve any future tolling projects.
In all, the average Hoosier driver will pay about $5 more per month. Hoosiers will start seeing results in July, as an additional $357 million in state and $260 million in local road funding become available. This will continue to increase year-over-year, reaching $1.2 billion by 2024. Thanks to sustainable user fees, this plan does not mortgage our future with mountains of debt or saddle future bond payments on our children. Unlike Washington D.C., the “Crossroads of America” has refused to kick the can down the road.