News From Terre Haute, Indiana

State News

June 10, 2012

Counties look for fix to fewer dollars for road repair

INDIANAPOLIS — A new state law gives counties easier access to property tax revenues to pay for road repair, but local and state officials say it won’t make a dent in Indiana’s crumbling infrastructure.

The new law, effective July 1, allows counties more flexibility to dip into their general operating funds to patch the fiscal holes created by a loss of revenues from the other pots of money that traditionally have paid for highway maintenance.

Under the new law, counties can spend property tax or other miscellaneous general fund revenue to fix and maintain their county highways without having to wait for an emergency or get unanimous approval by a county council to do so.

The new law is seen as just a temporary fix. Due to state’s property tax caps that limit local governments from raising taxes, counties that spend their general fund money on road repair will have to take those dollars from salaries, services or something else.

“To some degree it will help, but it doesn’t give counties any more dollars,” said state Sen. Beverly Gard, a Republican who has represented a rural district in east central Indiana for 24 years. “It won’t solve the problem. To fix some of our really severely deteriorating roads, it’s going to take a lot more money.”

Just how much? Recent studies by Purdue University’s Local Technical Assistance Center and by the American Society of Civil Engineers estimate that about half of all county paved roads in Indiana are badly need of repair, and that it would take more than $3 billion to bring Indiana roads and highways up to standards.

“Nobody likes to talk about raising taxes,” Gard said. “But it’s going to take additional revenue to fix this problem.”

The problem stems from the dwindling dollars in the revenue streams that local governments have traditionally used to pay for road repair and maintenance: A mix of gasoline taxes and vehicle registration fees, plus a hodgepodge of locally imposed taxes like the wheel tax.

The major sources of road repair money, collected by the state and doled out to local governments, have dropped by more than $100 million in the last decade.

“Meanwhile, what it costs to maintain and fix our roads has skyrocketed,” said Stephanie Yager, executive director of the Association of Indiana County Commissioners.

The drop in dollars to pay for road repairs is caused by a myriad of factors. Federal and state taxes on gasoline have long been used to pay for road repair;  but as cars become more fuel-efficient, the gasoline tax brings in less revenue.

In Indiana, of the 18 cents the state collects on every gallon of gas sold, about 13 cents goes for road repair and maintenance. The rest is used to help fund the Indiana State Police and the Bureau of Motor Vehicles.

About half of Indiana’s 92 counties have a wheel tax, imposed on local residents at about $40 to $50 a year. But even counties with wheel taxes are struggling to raise enough dollars for road repair, Gard said.

The state uses a general formula for how it divvies up road repair money based on the miles of roads in each locality and the number of people who live there. It seems fair but it doesn’t quite work. In picturesque Brown County, where Yager lives, there are 15,000 residents but about 2 million tourists who visit each year.

Brown County has turned to grinding up some of its asphalt roads into gravel to reduce maintenance costs. It now has about 175 miles of asphalt county roads and about 200 miles of roads with gravel surfaces. The county uses its $200,000 annual road repair budget mostly to buy thousands of gallons of thick oil and crushed stone to fill potholes.

State Sen. Jean Leising, a Republican who represents a rural district in south central Indiana, said bad roads is the most popular topic of conversation when she goes to county fairs. “They’re not just complaining about flat tires; they’re talking about potholes big enough to ruin their rims. It’s an expensive hit.”

For legislators from rural areas, like Leising and Gard, the lack of road repair money is an economic development catastrophe.

“If we want to attract more industry and better jobs to our rural areas, we have to have good infrastructure,” Leising said. “No one wants to invest in a community with bad roads.”

How to pay for it is the quandary. Some other cash-strapped states are testing the idea of taxing drivers for how many miles they travel rather than how much gasoline they buy.

Oregon and Minnesota are testing technology that would keep track of mileage; the technology uses GPS-like boxes installed in vehicles to track miles driven.

“The concept makes sense,” Gard said. “But you have to figure that people are going to see it as an invasion of their privacy.”

Gard is retiring from the Legislature this year, so it makes it easier for her to say what the remedy is: More money from taxpayers.

But she predicts legislators who propose that solution, “will take a lot of heat from people back home because people don’t like to pay for anything,” Gard said. “But they have to understand: If you want good roads, you’re going to have to pay for them.”

Maureen Hayden covers the Statehouse for the CNHI newspapers in Indiana. She can be reached at maureen.hayden@indianamediagroup.com.

 

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