Road funding bill clears committee

INDIANAPOLIS — A bill that would change the way highway funds can be used is being sent to the Indiana Senate for a vote.

Sen. Travis Holdman (R-Markle), who represents northeast Indiana and Jay County in the Senate, voted in favor of Senate Bill 207, which passed out of the chamber’s appropriations committee in an 11-2 vote Thursday despite criticism over the bill’s exclusivity and that money would be moved away from highway construction.

The bill, which Holdman noted is a “long ways away from being finalized,” would allow counties and municipalities that implement excise and wheel taxes to move funding away from highway construction and rehabilitation toward operational costs in 2022 and ’23.

Jay County is among the 55 counties in Indiana that has a wheel tax (a 10% flat tax on passenger vehicles, semis, motorcycles and motor driven cycles). Its excise tax charges trailers weighing less than 10,000 pounds $7.50 and any loads larger than that $40.

The bill would allow the county to only have to commit 40% of its motor vehicle highway fund toward construction costs while the rest could go toward highway equipment, right of way acquisition and other costs like fuel and oil.

Additionally, the bill would temporarily redefine items allowed to be purchased from the highway building fund — that 40% total — to include any costs associated with snow removal and de-icing such as salt or other necessary equipment.

State law currently requires 50% of any motor vehicle highway fund to go toward that highway building fund, a requirement Holdman said he constantly receives complaints about, while the rest is allowed to go toward operational costs.

“I’ve been flooded, as most members have, from municipal leaders to provide some relief from the 50-50 requirement from (motor vehicle highway) funds,” Holdman said.

Jay County auditor Anna Culy shared in that frustration.

Jay County had a motor vehicle highway fund total of $4,272,568.80 this year while Portland and Dunkirk have funds of $1,309,569 and $244,933, respectively.

Redkey, Pennville, Bryant and Salamonia have motor vehicle highway funds of $69,900, $54.541, $15,702 and $10,000, respectively. Though the budgets are smaller, all four towns would qualify for the funding mechanism under the bill.

Hypothetically under the bill, Dunkirk would have had to spend about $24,000 less this year toward highway building. This bill, if enacted in its current state, would only be in effect in 2022 and ’23.

Portland, however, is currently ineligible for the proposed funding flexibility as it does not have a separate wheel tax. Currently, only 12 Indiana cities and towns — mostly in northeast Indiana — have its own wheel tax.

Indiana law only allows cities with a population of at least 5,000 to implement a wheel tax, so there’s a clause in the bill allowing for municipalities with a population of 4,999 or fewer to automatically qualify for the temporary funding strategy.

This clause would allow every Jay County municipality except Portland to use an extra 10% of its motor vehicle highway fund toward operational costs.

Additionally, Portland would be forced to only use half of its highway fund toward snow removal and de-icing while Jay County and the rest of its municipalities could use any money from the fund toward those causes, all because the city doesn’t implement a wheel tax.

“Yeah, I’m not sure we should require the wheel tax,” Holdman said in a phone call after the meeting, noting other committee members and testifier’s concerns Thursday morning.

Sen. Blake Doriot (R-Middlebury) introduced the bill to the Senate committee and said it was designed to help counties and municipalities in northern Indiana to have available funds for snow removal and de-icing in light of budget restrictions caused by the COVID-19 pandemic.

This is not immediately the case in Jay County — all of its municipalities’ motor vehicle highway funds except Salamonia’s either stayed the same or increased this year compared to 2020 budgets — but the impact of the pandemic is expected to affect subsequent budgets, which prompted a response from the Senate.

“I do this very cautiously,” Doriot said while introducing the bill. “I’m probably the most pro-roads member of the Senate.”

Holdman said he is in favor of the relief for counties and municipalities, noting “tough times” are ahead from a potentially smaller motor vehicle highway fund in future budgets because the price of fuel is down and people are traveling less.

The bill’s fiscal note recognized that $29.9 million that would’ve went toward highway construction and rehabilitation could be re-appropriated as a result of the bill, with an even higher, incalculable figure possible depending on how many counties choose to spend highway construction money on snow removal and de-icing.



New bills

Holdman introduced three new bills at the full Senate meeting Thursday.

Senate Bill 383 would make various changes to corporate tax reporting, including forcing corporations with a gross income of more than $1 million to file taxes electronically.

Senate Bill 384 would increase the maximum amount Allen County and Evansville can collect under professional sports and convention development area (PSCDA) taxes from $3 million to $4 million.

Senate Bill 400 would require the Indiana Bureau of Motor Vehicles to create an electronic filing system to process vehicle titles and other required information, among other changes. Joining Holdman in authoring the bill are Sens. Chris Garten (R-Scottsburg) and Michael Crider (R-Greenfield).

State Rep. J.D. Prescott (R-Union City), who represents Jay County in the Indiana House of Representatives, also introduced a new bill at the full House session Thursday.

House Bill 1489 would allow teachers who aren’t part of a union to enter a contract with a school corporation that would normally be a violation under the corresponding collective bargaining agreement.

Prescott was also added as a co-author to House Bills 1005, 1463 and 1543, all of which are available to read on iga.in.gov.