UPDATE: Dem leader seeks to outdo Pence on road funding

The leader of the minority Democrats in Indiana's State House on Monday ridiculed a $1 billion highway improvement plan Gov. Mike Pence recently proposed, and sought to outdo the Republican governor by calling for even more spending to fix the state's poorly rated roadways in the coming four years.

"The state of our infrastructure at the crossroads of America is disgraceful, it's embarrassing and it needs to be improved," said Rep. Scott Pelath, D-Michigan City, who said Pence's plan was designed to fix a political problem but fails to substantively address the issue.

Democrats have little power in the Statehouse, where they are dwarfed by massive GOP majorities. But they've bombarded Pence with criticism, saying he built a $2 billion budget reserve at the expense of properly funding state government.

The condition of Indiana's roads, bridges and highways is already a sticky campaign issue. Even though the election is a year off, Pence sought to head off Democrats last month when he announced his plan to repair state highways.

Just like the Pence plan, the Democratic proposal would not raise taxes and requires lawmakers' approval. But it would fund improvements to local roadways, which Pence has not committed to.

Both Pence and Pelath have indicated that tapping into the state's budget reserve by varying degrees will be necessary. But while Pence has called for borrowing $250 million while siphoning another $250 million from the reserves, Pelath's $2 billion proposal calls for rewriting state law to change the way taxes on gasoline sales are collected.

Indiana's gas tax is the state's primary source of paying for roads. But the state also collects additional sales tax on top of that, which can be spent however lawmakers choose. Pelath says it should be mandatory for that additional sales tax to be spent on roads — a move that would likely require taking $500 million from state reserves next year and force lawmaker to make tough spending decisions when the next two-year budget is drafted in 2017.

Pence previously said he was open to similar ideas. But on Monday, Republicans — including the governor — swiftly criticized the Democratic proposal.

It would force lawmakers to "choose between cutting $500 million from the general fund for vital services like K-12 tuition support, teacher pensions, Medicaid and state hospitals or going broke in four years," Pence aide Matt Lloyd said in a statement.

Republican House Transportation committee Chairman Ed Soliday said the plan was "not sustainable because it will deplete our state's reserves and leave our long-term road and bridge funding problem unresolved."

Soliday has called on lawmakers to develop a long-term solution to the state's road funding woes, which are guaranteed to continue as motorists buy more fuel efficient cars and spend less on gas that the state can tax.

So far, neither Pelath nor Pence has proposed a solution for that.