INDIANAPOLIS (AP) — Though it’s the last thing elected officials want to discuss in an election year, a proposed tax increase is on the table as Republican Gov. Mike Pence and lawmakers negotiate in the waning days of the GOP-dominated Legislature’s spring session over how to finance improvements to the state’s deficient infrastructure.
Republicans have shown a sense of urgency to address the issue since Democrats attacked them for a monthlong emergency closure of an Interstate 65 bridge near Lafayette last summer. The need was underscored last month when concrete from an overpass in Terre Haute started crumbling onto Interstate 70, leading to a temporary shut down for emergency repairs.
“We do have an infrastructure that is in need of repair,” said House Speaker Brian Bosma, adding that the overpass was “indicative that there is an issue and we need to address it.”
Bosma’s House Republicans would like to raise funds by charging an additional $1 per pack of cigarettes while raising the state’s 18-cent gas tax by four pennies a gallon. But they remain at odds with Pence and the Senate, who are in lockstep opposition to any tax increase.
The split sets the stage for pointed negotiations during the final week of the session, which is scheduled to adjourn on Thursday, with much at stake politically. Pence faces a stiff re-election challenge in the fall from former House Speaker John Gregg, a Democrat, while Bosma is believed to have future gubernatorial ambitions of his own.
The speaker has argued for a long-term financing plan that includes the tax increases, under a broad House roads package that would create a dedicated revenue stream for infrastructure while pumping an estimated $714 million into state roads spending in 2017 alone. It also would direct about $130 million to local roads projects, with more to come in future years, according to projections from the Association of Indiana Counties.
Pence and his Senate allies, meanwhile, have called for a short-term solution that would draw down the state’s $2 billion budget reserves to pump an estimated $470 million into state roads spending in 2017, while also handing local income taxes held in reserve back to local government for projects. Senate leaders also want to conduct a study before entertaining the possibility of tax increases, even though officials have studied the state’s transportation needs multiple times in recent years.
House leaders may have strengthened their position by recently folding $42 million in Regional Cities economic development funds — a key piece of Pence’s re-election platform — into their roads plan. They previously had held onto the development bill, saying there would not be enough support for it to pass without chaining it to their proposal.
“It’s unfortunate that folks aren’t willing to look at the long-term,” Bosma said. “It’s very clear that (Pence) wants a program that only funds the next governor’s term and doesn’t look beyond that.”
Pence, Bosma and Senate Republican Leader David Long met for several hours Friday in search of a compromise, but gave no details afterward. Pence spokeswoman Kara Brooks said they will meet again Monday.
Rep. Ed Soliday, a Valparaiso Republican who is chairman of the House Roads Committee, said that Indiana’s infrastructure ranks in the bottom third of U.S. states. Without additional funding, he says, the state’s roads aren’t going to be getting any better because gas tax revenues have declined as cars become more fuel efficient.
But many GOP leaders bristle at the suggestion that the state faces a crisis. When asked about the crumbling bridge in Terre Haute, Long dismissed it as something “that happens all over America.”
“I think Indiana is in pretty good shape right now,” he said, arguing that the state has done “more construction in the last decade than any other state in the country.”
As recently as last month, Bosma had agreed with those saying the state faces a roads crisis. But on Friday he backed away from that position, saying “there’s not a crisis. We don’t have a crumbling infrastructure.”
Indianapolis Rep. Dan Forestal, the ranking Democrat on the House Transportation committee, said Republicans want to improve roads but worry that being too candid could come with a political price.
“The governor did the same thing — he said there is no crisis. But then he rolled out his big plan,” Forestal said.
“There’s a crisis,” he asserted. “Everyone knows it. If people drive down the street, they know our infrastructure is in bad shape and not getting better.”
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