House transportation leader: Pence funding plan a ‘gamble’

A key Republican leader on transportation issues dismissed Gov. Mike Pence's short-term plan to rebuild the state's infrastructure as a "gamble" that would not provide a steady stream of funding to maintain deteriorating roads and bridges.

House Roads and Transportation Chairman Ed Soliday said Wednesday that the Republican governor's proposal relies heavily on state budget reserves for funding. That means that if lawmakers in the future do not set aside enough money, a provision to release the excess dollars for road funding will not be triggered, which could lead to wild swings in the amount of money that is available, he said.

"You have no idea what it's going to be," said Soliday, of Valparaiso, "That's totally dependent on revenue and the budget. So it could be zero. It could be a lot."

The condition of Indiana's roads has emerged as a major issue not only for lawmakers, but also on the campaign trail. There is a major division among majority Republicans over how to handle the funding, with Pence and the Senate leaders signaling they are at odds with their counterparts in the House, who seek to raise gas and cigarette taxes to provide a long-term solution.

Pence, on the other hand, has proposed borrowing $240 million while drawing $241 million from the state's budget reserves to boost short-term road spending in 2017.

Micah Vincent, director of the state's Office of Management and Budget, said Pence's plan does not aim to address long-term needs. A bill backed by Pence in the Senate would allow the state to draw down its reserve accounts for road funding in the future, but Vincent said the governor only needs that authority in 2017 to make his $1 billion spending proposal work.

"If there's money in the reserves in a future year then that's fantastic. But that is not money we are counting on to get to our $1 billion," Vincent said.

Part of the House Republicans' plan calls for raising the gas tax by an estimated 4 cents and increasing the cost of a pack of cigarettes by $1, but Pence is adamant that he does not want to approve a tax increase.

On Tuesday, Pence rebuked the House GOP's plan during his annual State of the State address.

"I think when you have money in the bank and you've got the best credit rating in America, the last place you should look to pay for roads and bridges is the wallets and the pocketbooks of hardworking Hoosiers," Pence said.

Soliday said he was "a little surprised" by how strongly Pence spoke out against the House GOP's plan, of which Soliday was a key architect.

The House GOP plan has support from many industry groups, including truckers associations and medical organizations that would like to see a decline in the number of smokers. But it is opposed by cigarette retailers, including convenience store chains, that say it will affect their profitability.

In an odd twist, Democrats are aligned with Americans For Prosperity, an anti-tax group that is the main political advocacy group for Charles and David Koch, billionaire brothers who spend millions on conservative causes.

House Democrats oppose a tax increase and have instead called for a change in the way lawmakers spend a portion of current gas tax revenue by redirecting all gas tax money that goes to other priorities back to road spending.

In a written statement released Wednesday, AFP Indiana Director Justin Stevens said Indiana's gas-tax revenue has risen over the past four years, contrary to popular belief, to $540 million.

"Our problem is not lack of revenue, but lack of priorities," Stevens said. "For too long, revenue derived from transportation has been used on other things. With only one-sixth of gasoline sales tax revenue going to fund roads, we have consistently used funds that should have gone to roads for other budget items."