News From Terre Haute, Indiana

State News

February 24, 2013

Counties’ organization backs GOP House budget plan over Pence plan

INDIANAPOLIS — The Republican-dominated Association of Indiana Counties has thrown its support behind the House Republicans’ budget plan that calls for spending the state’s surplus on roads and schools instead of a tax cut proposed by Gov. Mike Pence.

The association’s members have been lobbying legislators to vote for the proposed House budget bill that increases funding for transportation infrastructure by $500 million over the next two years, with about half of that going to local governments to fix their crumbling roads.

The bill, which the Republican Pence opposes because it doesn’t include his tax cut, is scheduled for a final House vote early this week then moves to the Senate.

The Association of Indiana Counties favors not just the extra dollars but the funding mechanism: Under the budget plan crafted by the Republican-controlled House Ways and Means Committee, all gas taxes will be redirected to roads. Currently, some are siphoned off for the Indiana State Police and the Bureau of Motor Vehicles.

“We think this is the fiscally responsible thing to do,” said Andrew Berger, the association’s government affairs director.

The association is made up of elected county officials from across the state, and most are Republican.

They may have voted for Pence last fall when he ran on a pledge to use the state’s surplus to cut taxes, but road funding is critical to them: Between 2000 and 2010, the major sources of road repair money collected by the state and doled out to local governments dropped by about $100 million, while road repair costs doubled.

Association president Penny Luckinbill, the Republican Marshall County auditor, said the House budget plan provides the additional funding that counties need “to begin reclaiming some of the roads that have fallen into severe disrepair.”

Elkhart County Commissioner Mike Yoder, a Republican and an association board member, said the road funding plan in the House budget bill is good public policy because it uses road-related taxes to pay for road repairs and maintenance. But he said it still won’t generate enough money to pay for the estimated $800 million in needed county road repairs.

“We’ve been telling our legislators for the last several years that there is a continual problem with road funding,” Yoder said.   

The association’s support comes at a time when Pence is engaged in an intra-party fight over the budget with Republican legislative leaders.

He’s unhappy that the House budget bill doesn’t include his 10 percent cut in the state income tax rate. The cut would save the average Hoosier about $100 but cost the state $720 million over the next two years and $500 million every year after that.  

Republican legislative leaders want to spend that money on schools, roads, and services for the needy, but Pence has defended the tax cut, saying it gives new tax relief to “hardworking Hoosiers.”  

The House budget bill also doesn’t contain his road funding plan that would pump state dollars into transportation infrastructure only after Indiana’s surplus tops 12.5 percent of what it spends in a year. It would divert the extra payments to pension obligations and the automatic taxpayer refunds that are currently triggered by the 12.5 percent surplus.

Pence’s budget team estimates his plan would add $347 million to road funding over the next two years. But county officials fear it’s a temporary fix at best; both House and Senate legislative leaders have also rejected the idea.

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

 

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