One of the biggest issues facing state legislators is how to provide adequate funding for Indiana’s roads and bridges. Katrina Hall, director of public policy for Indiana Farm Bureau, believes now may be the best opportunity in a lifetime for rural counties to obtain significantly more funding to maintain and upgrade local roads and bridges.
A bill sponsored by Rep. Ed Soliday, R-Valparaiso would attain the objectives that Farm Bureau delegates endorsed in their most recent policy debate.
Here is an exclusive interview between Indiana Prairie Farmer and Hall about this topic.
IPF: Didn’t the 2015 General Assembly address road funding?
Hall: Yes, but it only started the process. Before 2015, gasoline and diesel tax collected on fuels went to road funding. However, sales tax on fuels went into the general fund. In 2015, legislators began shifting sales tax money from the general fund to roads. However, only about 2.5 cents of the 7 cents per dollar were shifted. That leaves 4.5 cents still going to the general fund.
IPF: Would the proposed bill shift more of the sales tax money to roads?
Hall: Yes. The original bill would have shifted all sales tax on fuels to roads, phased in over time. Democrats applied pressure for a more immediate increase in road funding. A Republican amendment added to the bill would now shift the rest of the sales tax on fuel to roads. Further amendments are possible, but it’s difficult to foresee what those might be.
IPF: Would the current bill also involve a tax increase on fuel?
Hall: Yes. Most legislators and even the administration note that to generate the funds needed to make a difference for roads, especially local and rural roads, more revenue will be needed. The current tax on gasoline, in addition to sales tax, is 18 cents per gallon. The current tax on diesel fuel for over-the-road use is 16 cents. The legislation would add an additional 10 cents per gallon on both fuels. It would also include an increase in the diesel surcharge.
IPF: Have Farm Bureau members been supportive?
Hall: Yes, very much so. By Feb 10, 190 members from 50 counties had visited the Statehouse and discussed the legislation with their senators and representatives. Many more have talked to legislators at local meetings. Our counties will continue bringing members to Indianapolis to support the bill.
IPF: Diesel fuel for use in tractors for fieldwork has been exempt from taxes. Will that continue?
Hall: Yes. Rep. Soliday is very cooperative and insists that this exemption stays in place. Farmers need to communicate the importance of that exemption to legislators.
IPF: Is it true there are rumors claiming farmers don’t pay any road taxes?
Hall: Yes, and they’re simply not true. When farmers drive semitrucks and haul grain or inputs, they pay fuel and sales tax like anyone else. The exemption is only for diesel fuel containing dye designated for off-road use.
IPF: If the bill passes, will local entities have a say in how the money is spent?
Hall: Yes. The money will be divided out to local units of government just as it has been. It will be up to local authorities to decide how to best use funds. It’s likely that in rural areas, most of it may go for maintenance initially. Most counties simply haven’t had funds to maintain existing roads and bridges.