2013-04-23 / Front Page

Local Road Funding Key Issue In Statehouse Budget Debate For Representatives, Senators

by Michael Stanley
Staff Writer

Local officials are keeping a close eye on the current budget debate at the Indiana Statehouse as members of the House and Senate work to determine a compromise in proposals.

A key difference between budget proposals from the two chambers is the increased amount of funds set aside for counties, cities and towns for local road maintenance.

While both proposals work to address the issue of local road funding, the two budget bills approach the need differently.

According to recent reports from the Association of Indiana Counties, the House version would be the most favorable option for counties such as Owen, gaining an additional amount estimated at $557,949 for 2014 and $572,375 in 2015. This money would require no additional taxes or action needed locally.

“This equates to a total of $1,130,324 over the next two years, on top of the more typical $2.8 million we would expect to get for the same time frame,” Owen County Councilman Anton Neff explained. “That equates to approximately 14 more road miles of asphalt, or 51 more road miles of chip and seal, or any combination in between. This would be of tremendous help to maintain our road system.”

The version put forth by the Senate could provide an additional $276,643 in 2014 and an estimated $485,819 in 2015, totaling $762,462 over two years, which equates to just two-thirds of what the House offers. In order for the county to secure those funds through the Senate’s plan, each county will only receive a percentage of the new revenue based on the current Local Option Highway User Tax (LOHUT) rate.

“Currently, our LOHUT rates are 50 percent of the maximum allowable, thus over the next two years we would only see an estimated $381,231 in additional funds, half of what we could get,” Neff added. “Essentially, the Senate budget not only distributes less to begin with, but for counties like us that do not already charge the maximum LOHUT rates, we will be shorted.”

Currently, county highway departments such as Owen receive funding amounts identical to those allocated in 2002 despite inflation caused increases in materials and equipment costs.

“Our county commissioners, our county council members, and our highway department have heard from an increasing number of concerned residents about the deteriorating condition of many of our county roads,” Neff said. “We have been pursuing a variety of things to improve the situation which to-date have included lobbying our state legislators to make changes in local road funding formulas and distribution amounts, development of our own comprehensive road plan, and considering adjustments to our county’s Local Option Highway User Tax, commonly referred to as the wheel tax.”

Neff also noted that aside from the LOHUT, primary sources of funding for local road maintenance include the Motor Vehicle Excise Taxes and gasoline taxes, as set and distributed at the state level.

“Our state legislature is well aware of the road funding issue as we have joined officials from all over the state in pressuring lawmakers to take action,” Neff said. “On behalf of our county, we have brought the issue up at our legislative breakfasts locally and at a two-day Association of Indiana Counties (AIC) legislative conference at the statehouse. We have encouraged the public to contact them to voice support for our roads and we have written letters and corresponded via email. We have monitored all legislation closely.”

Angie Lawson, current vice president of the Owen County Council, noted current funding levels only allow the county highway department to complete a few miles of road maintenance each year, leaving council members and others to wonder if they will ever be able to get local issues resolved.

“The condition to the county roads over the last several years has deteriorated to a critical state in some cases. The county commissioners and council are working with the highway to develop a master road plan so that we effectively and efficiently get the best bang for our buck. With the state increases for road funding it would allow us locally to make decisions on how many more roads can be fixed,” Lawson explained. “Obviously, the House version of the state funding is much more attractive and would allow for many more roads to be done in a more timely manner, however, over the past several years the state has taken more and more money from us locally – fazing in more funding back to the county highway department is something that has been needed for at least the past five years. One time money such as we saw with Major Moves several years ago did not gain us the necessary long-term funding needed for maintenance of county roads. Owen County has a workforce of 10,270 with 1,142 drawing unemployment. Among the eight counties in our region, Owen County ranks second highest in unemployment directly behind Lawrence County. With the proposed 10 percent reduction in income tax that would result in the county receiving less funds over the next several years, we would be put in a position to not be able to address many of the current issues that we are being faced with on buildings and infrastructure in the county.”

Indiana District 44 State Representative Jim Baird (R-Greencastle) is especially sensitive to the issue of road funding, having previously served as a Putnam County Commissioner before his stint at the statehouse.

“The revenue forecast that came out (April 16) showed that in fiscal year 2013, we’re up 1.7 percent. In fiscal year 2014, we’re showing a 2.5 ($14,728,000) increase over 2013 and in 2015 a 3.7 ($15,271,000) percent increase,” Baird said. “That gives us a clue on what kind of dollars we can expect. The senate is tying their funding to the wheel and surtaxes. After it comes out of conference committee, they have to go back through both chambers for final approval. The funding for roads and bridges has been of interest to me since I came up here... we’ve got the best attitude about that and a desire to want to make those funds available. I think all of that has an impact on economic development and it is a very common comment from our constituents. I’m extremely pleased that this is part of the focus of the budget.”

Baird also noted the income tax cut of 10-percent requested by first-term Indiana Governor Mike Pence remains on the table during the conference committee discussions.

“The budget still has a lower individual income tax, from 3.4 to 3.3, which is a three-percent tax cut, which would be effective on January 1, 2015,” he noted. “We’re going to try to use the Healthy Indiana Plan for the Medicaid and Affordable Care Act. I think it’s interesting that we have a structural balance in reserves in the end... it’s extremely important for us to live within our means.”

Also fighting for the House budget’s version of funding for local roads and bridges is Indiana District 46 State Representative Bob Heaton (R-Terre Haute).

“In the Senate version, they’ve said if a county has a maximum wheel tax they will consider giving them the money. On the House side, we’re saying if you have a wheel tax or not, we want to give you ‘x’ amount of dollars with no strings attached,” Heaton said. “We’ll see what happens next week. There is a lot of negotiating going on behind the scenes, but the bottom line is counties need money for their roads. The Senate might say they will bend on that, but in another area they want us to see it their way, so there is that kind of stuff going on. When you have a bigger pot, $29 or $30 billion, it seems like there are more needs and desires out there at every level that people want to support.”

Indiana District 39 State Senator John Waterman (R-Shelburn) has hopes his chamber’s leaders will conform to the House version.

“We’re hoping to keep (the House’s version) in place during conference committee. Right now the counties and cities are behind around $1.1 billion in funding for bridge structures and $3.5 billion in roads,” Waterman said. “We’re also trying to stop the chip and sealing of state highways because it’s degrading to folks in the rural areas to have our highways turned back into gravel. It will stop economic development, because companies won’t want to get their trucks on the roads. It may save a little bit of money on the State’s end, but it will cost the rural areas a lot more. I spoke to Governor Pence about it and he said he would take it under advisement.”

First-term Indiana District

37 State Senator Rodric Bray said the need for funding is one he’s concerned about for his represented counties of Owen, Morgan and Putnam.

“Consistently when I’m out just meeting with people, that issue comes up. The commissioners in every county I represent are very interested in that, so it’s been on the forefront of everyone’s minds at the General Assembly this year, how to get more funding there,” Bray said. “As a percentage of the budget, there’s not much difference in the House and Senate versions, but now that both are passed we’re in conference trying to mesh the two together. The more money the better. I know it’s necessary, so hopefully we will continue to be able to give them as much money as possible. (The budget) seems to be a pretty good product at this time, even though it’s still a work in progress. The Senate budget does have about $5 million annually in tax relief once you put together the income tax cut and eliminating the inheritance tax. I’m optimistic that once it gets through conference committee it will be a product we can all be proud of.”

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