House approves local road fundraising measure

Indiana’s House on Thursday easily approved its attempt at heading off anticipated transportation funding shortfalls—with provisions aimed mostly at boosting local fundraising.

Fuel efficiency standards, electric vehicle adoption and inflation are complicating state and local efforts to pay for roads and bridges.

Rep. Jim Pressel, R-Rolling Prairie, has previously described his work as “pages of options.” On Thursday, he rolled through his legislation’s varied provisions; no other lawmakers took to the microphone.

House Bill 1461 would set a $200 million cap on awards from Community Crossings, a popular matching grant program local governments can use to fund local road and bridge projects.

At the end of the 2025 fiscal year, any excess—estimated at $157 million in a fiscal analysis—would fund fixes for dangerous at-grade railroad crossings. Funds wouldn’t transfer the next year.

But in later years, the first $50 million of any surplus would go to the state’s capital and largest community for “secondary” streets. That’s as long as Indianapolis-Marion County matches the money with dollars not already allotted for transportation. Officials there have long complained the state’s funding formula—which uses road miles, not lane miles—leaves the community unable to pay for maintenance on its many wide former state highways and other thoroughfares.

Other counties and municipalities would split what’s left according to lane mileage. The analysis estimates that they’d get $55 million in the 2027 fiscal year transfer, but just $2.5 million in the 2028 fiscal year and later transfers.

That language is recent. Until edits made Wednesday, Community Crossings’ excess would’ve gone into the state’s transportation infrastructure funding formula—diverting millions of dollars annually from locals to the Indiana Department of Transportation.

The legislation would also change Community Crossings awards. Less-populous applicants would have smaller matches to meet.

But most of the changes emphasize local fundraising.

Of the $200 million in the program’s pot of money, half would be open to applications from cities and counties with wheel taxes; counties would need to have populations of at least 100,000 residents. The other half would be set aside for all other local government applicants; those without wheel taxes would be eligible for just 50% of the maximum award. Beginning in 2028, all local units of government eligible for the surtax and wheel tax would have to adopt them in order to apply for grants.

The proposal also unstacks the vehicle excise and wheel taxes, so that Hoosiers living in cities within counties that both charge the taxes only pay to one unit of government. It also gives Indianapolis significantly higher caps on the vehicle excise and wheel tax.

The legislation additionally would let communities tap into surplus money held by townships.

The bill also updates tolling language left over from a 2017 law; the governor has had the power to add tolls to specific roads without legislative authorization since then. Former Gov. Eric Holcomb never took lawmakers up on the offer; a spokesperson for new Gov. Mike Braun hasn’t answered questions on his position.

It also makes new additions. Current law requires that new interstate highway tolls fall at least 75 miles from existing interstate tolls, but the legislation would sidestep that if INDOT applies to the Federal Highway Administration for a waiver—retroactive to January. Any projects that get waivers wouldn’t need the General Assembly’s permission to impose user fees like new tolls.

What’s left in the legislation goes to the Senate following the 71-21 vote, which came in time for a Thursday deadline.