The choice is difficult but clear: Raise taxes
(or user fees), spend less money on roads or, most likely, a combination of
both.
Of course, no one wants to see taxes go up,
least of all politicians responsible for increasing them. Indeed, state
legislators are loath to raise taxes but would be happy if county governments
did. Similarly, county officials across the state want to hold the line on
local taxes and believe the state should find the ways to provide more money.
State Rep. Jeff Espich of Wells County, the
Republican House expert on budget issues who is retiring this year, has long
called for indexing the gasoline excise tax to inflation, allowing for regular
but small increases. And in retrospect, after agreeing to lease the Indiana
Toll Road for $3.8 billion, legislators could have changed the formula on
distributing the excise tax revenue to provide more to local government and
less to state government, which received the bulk of the lease proceeds.
Now, with the amount going to local governments
dropping by 15 percent – more than $40 million – in six years, it’s doubtful
Hoosiers could accept an increase in the gas excise tax high enough to make up
the difference.
Yet not taking care of the most heavily traveled
roads simply isn’t an option. Hoosiers would be best served if officials
approached the problem on several fronts. Among the possibilities:
•State lawmakers could eliminate the sales tax
on gasoline or designate a certain percentage of it for roads. Yes, the state
would lose about $500 million a year that goes toward the general fund –
requiring spending some of the state’s ample surplus and further budget cuts.
But eliminating or cutting the sales tax on gasoline could allow an increase in
the excise tax without costing motorists even more.
•Counties have to do their part, too. Only about
half of the state’s counties have adopted a wheel tax – effectively, a local
tax on motor vehicles. Allen and some other counties don’t have a property
tax-financed cumulative bridge fund. They should, especially in Allen, which
has a healthy surplus of its own.
•Inexplicably and with little attention, at some
point in the past lawmakers decided to divert some of the excise tax revenues
from direct spending on road projects to the administrative expenses of running
the Bureau of Motor Vehicles, the Indiana State Police and the motor tax unit
of the Department of Revenue. That took $127 million away from road projects in
2011 alone. Lawmakers should consider reducing or eliminating the excise tax
revenue going to the BMV and state police, though, again, that would mean
funding for those agencies must come from elsewhere or be cut.
None of the options are good. But all – or a
combination of all – are better than allowing the most-used roads to
deteriorate. The good part of the shortfall is that it is due to motorists
using less gasoline because they have more fuel-efficient cars they are driving
less often.
Bad roads reduce gas mileage and increase
maintenance and repair costs on vehicle owners. They mean truck drivers and
business travelers must spend more time on the road, raising costs for
businesses.
Even tax increases will most likely be stopgap
measures. As cars increasingly become more fuel efficient and more alternative
fuels are used, revenues from the excise tax will continue to drop.
Bad roads or higher taxes? No one likes the
choice, but it will have to be made.
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