Hoosier road funding may change for the first time since 2017
Editor’s note: This story was originally published in the February 7, 2025 issue of Indiana Transportation Insight before amendments were made to HB 1461.
The House Committee on Roads and Transportation has been on a roll with unanimous support for passing all bills so far – but all good things must end, and House Committee on Roads and Transportation Chair Jim Pressel (R) of Rolling Prairie suspects HB 1461 will break that streak.
He seems to be correct – after hours of testimony and discussion, the bill was held, with the likelihood of incoming amendments sky-high. The road funding omnibus bill has struggled to gain traction, and the January 27 committee hearing illustrated why. Experts, stakeholders, and legislators alike struggled to come to a consensus on most provisions, as many options may result in unintended side effects difficult to foresee before they’re implemented.
How much of HB 1461 will make it through committee is difficult to predict. The last time the legislature was forced to consider significant road funding changes was 2017 . . . and many of those major players are returning to support (parts of) HB 1461.
“Very important conversation today,” Rep. Pressel asserted at the start of the meeting, setting the tone for the discussion to follow. He reminded the committee of the FIRSST Task Force numbers and, as promised, brought in “the big guns” – that is, Jennifer Sharkey from Indiana Local Technical Assistance Program and Aaron Potter from the Indiana Department of Transportation – to assist the legislators in interpreting the concerning data.
The committee chair then reviewed some of the more significant items within his policy buffet, which ranges from altering Community Crossings to a local wheel tax to adding fees onto deliveries from services like Grubhub to fund infrastructure. (Yes, the unpopular toll road expansion was in there, too.)
Rep. Pressel signaled his willingness to reconsider the funding numbers for the Community Crossings Matching Grant (CCMG) if his proposal to lower the population threshold, allowing all communities to apply for up to $1.5 million, proves inadequate. He also committed to reinstating LocalTrax, a program that provides grants to cities, towns, and counties for grade separation, crossing closures, and other safety improvements on local roads, for one year. With CCMG and LocalTrax working in tandem, Rep. Pressel believes that projects not eligible for Community Crossings funding may still receive the financial support they need through LocalTrax.
Reviving Measures From the Past
LocalTrax, just like Community Crossings, was the brainchild of Rep. Ed Soliday (R) of Valparaiso, with the rail funding program codified through his HEA 1002-2017. At the time, Rep. Soliday referred to LocalTrax as a “successful” pilot program and is likely a guiding force in its return. The U.S. Department of Transportation agrees with him, listing LocalTrax as a “noteworthy practice” in a guide for other states in 2018.
To that point, we’re hearing that Rep. Soliday is exercising his considerable influence broadly during the 2025 road funding proceedings. If you recall, Rep. Soliday also played an instrumental role in ushering in Community Crossings and was one of the first to defend the program’s intentions when Sen. Fady Qaddoura (D) of Indianapolis questioned its efficacy during the first FIRSST Task Force meeting.
Rep. Pressel may be the current chair, but Rep. Soliday looms large over the process. Soliday was head of the House Committee on Roads and Transportation for years, and held the reins during the last road funding overhaul in 2017. Some still believe he’s the legislator best informed to make big, holistic decisions heading into road funding round two.
City of Indianapolis Chief of Staff Dan Parker advocated for reevaluating CCMG disbursement amounts, calling it “critical.” And it’s not hard to see why: Indianapolis has consistently been brought up in discussions on which communities CCMG has failed by legislators, stakeholders, and citizens alike. Parker tried to create a sense of scope by sharing that Indianapolis holds “a little less than a third” of INDOT-governed roads. “Road funding should follow the traffic amounts,” he asserted.
Parker, a former director of the Indianapolis Department of Public Works, was a champion for 2023’s SB 283, which allowed all residents of the “consolidated city” to be counted in population statistics to obtain more accurate funding amounts through the motor vehicle highway account.
Grubhub and Lyft Fees
One of the biggest points of contention has been the proposed retail delivery fee, which Rep. Pressel accurately predicted would spawn the most amendments. The fee would exclude groceries, but is otherwise very broad in scope, theoretically covering anything from Lyft rides to DoorDash orders to Amazon deliveries. Rep. Pressel reiterated that no entity would force a community to implement it, counties could opt in or out as they saw fit, and the provision should be viewed as a “tool in the toolbox.” The rate applied would be up to one dollar.
National Federation of Independent Business Indiana State Director Natalie Robinson shared that more than 80% of their members oppose the idea. She also felt the provision would disproportionally affect smaller businesses through financial and administrative burdens; Indiana Retail Council, Inc. President Melissa Coxey joined her in this opinion. Robinson believed the bill needed to become less broad as well.
Chamber of Progress State and Local Government Relations Director Brianna January was among the most concerned to testify, noting that rideshare costs may spike even as some individuals rely on those services to travel to work. January explained that people who heavily utilize rideshare services and food deliveries, such as the medically disabled, may face up to $50 more per month if the fee is implemented. The chamber is a self-described “center-left tech industry policy coalition promoting technology’s progressive future.”
Rep. Pressel responded that he would work with concerned parties, but ultimately if “on a $25 order of chicken wings – which I find excessive anyway – the delivery fee was $3.49, the priority fee was $1.99, service fee was $6.31, I find it hard to believe that half a dollar on top of those fees would really make a difference.” Accelerate Indiana Municipalities Government Affairs Director Amy Krieg agreed with Rep. Pressel and backed the retail delivery fee.
Highway Tolls and Their (Few) Allies
Playing around with Indiana’s toll road has never been a popular measure. While Indy Chamber’s Jenna Bentley supported expanding tolls, Indiana Motor Truck Association President Gary Langston strongly opposed most of the bill, including toll road provisions. Langston pointed out that the fuel tax legislation from 2017 was intended to be a “20-year solution,” yet it has already proven insufficient. He also emphasized the recent toll increase specifically affecting trucks, noting that if the current version of HB 1461 is enacted, truck drivers would face new fees twice.
Langston also highlighted those tolling charges “can and have been assessed in error, sometimes by thousands of dollars,” an assertion bolstered by RiverLink’s toll operator going head-to-head with Rep. Wendy Dant Chesser (D) of Jeffersonville, which we outlined for you in our August 9, 2024 issue.
Langston raised another point: The Braun Administration has promised an intensive overhaul of state agencies and associated costs, so he believes “decisions on dollars” to be “preemptive.” He contends that Indiana transportation policy should be focused on “efficiency and roadway safety.”
House Roads Vice Chair Dave Heine (R) of Fort Wayne brought up Indiana’s status as a state leader in truck maintenance, and wondered if Langston had fully taken that into account in regard to funding. Langston replied “We get calls a lot more often than we would like about Indiana’s interstates” and reminded the legislators that “tolls only rise.”
During a line of questioning from Rep. Pressel, Langston clarified he doesn’t inherently think INDOT is overspending, but he felt it would be hard to make a call on that before the promised evaluation. Rep. Pressel heard his concerns and agreed accurate numbers matter, but he stopped short of acquiescing to, as he put it, “kick the can down the road – no pun intended.”
Indiana Farm Bureau Senior Director of Policy Strategy Katrina Hall joined those with concerns about the bill’s toll road expansion. Hall asserted that tolls should be seen as “more of a user fee” and that there are “other ways to shift money around.”
In contrast, Build Indiana Council President Brian Gould was a staunch advocate for most of HB 1461 – including the toll road language. He emphasized the impact of inflation, asserting that federal funding during Covid-19 may have created “a false sense of security” and that much of that safety net would be cut imminently. He shared that more than 300 INDOT projects have been postponed due to funding uncertainties. That’s not to say Gould thinks the bill is perfect – he called it a “great starting point … we’re going to have to collaborate.”
Gould invoked a comparison to the Daniels Administration Major Moves program, reminding everyone how it was also a tough sell that ended up paying dividends toward Indiana infrastructure.
Major Moves is worth talking about here, as, while it’s generally lauded today, left some Hoosiers less-than-pleased at the time.
In 2009, complaints that “Mitch sold our toll road” were common, referring to the state’s lease of the Indiana Toll Road for 75 years to Macquarie-Cintra for $3.85 billion, despite the promise that it would help balance Indiana’s budget and make way for new infrastructural improvements. And indeed it did – the choice eventually contributed towards I-69’s Evansville stretch, U.S. 31 highway upgrades, and a U.S. 24 Indiana to Ohio connection, among scores of other projects. While lease advocates tried to remind skeptic that the toll road was then costing taxpayers 34¢ for every 15¢ it collected; this was to no avail in the court of (some) public opinion. Gould called for more public-private partnerships after the success of Major Moves, deeming them a good tool to have in the budget-balancing toolbox.
An article by Mitch Daniels Leadership Foundation Fellow Teddian Jackson grants a unique perspective on Major Moves. The author, originally from Jamaica, watched his country turn from “democratic socialism” to a more capitalistic form of government once it was determined that the former was “untenable.” Due to that experience, when he moved to Indiana, he struggled to understand why Indiana citizens appeared to view the government relinquishing control to its own profit as a bad thing. He hypothesized that because they had never experienced what it is like for a government to have complete control over their state, they couldn’t appreciate what leasing the toll road did for Indiana.
Something similar may be happening with the more controversial provisions of HB 1461, diminishing ‘for the greater good’ as a priority for the public (and some legislators). Rhetoric revolving around “higher taxes,” “more tolls,” “added fees,” and “take care of it yourself” obscures the greater truth that Gould pushed during his testimony – if nothing changes, the Crossroads of America is in trouble. Or, as Association of Indiana Counties Director of Government Affairs Ryan Hoff frames it, the longer Indiana waits to take infrastructure investment seriously, the less efficient HB 1461’s measures and their funds will be.
Indiana Chamber of Commerce Vice President of Taxation David Ober also counterbalanced concerns with his approval for increased tolls, albeit requesting to examine some of the language to ascertain the impact on local business logistics. APPIAN President Laurie Maudlin also supported an overhaul of Indiana’s infrastructure budget. Maudlin also brought up the urgent need to address safety issues on U.S. 30 and reminded the legislators that it’s not just major highways and other well-known infrastructure projects that would draw from the budget; 70% of driveways do not meet baseline standards, for example.
Wheel Tax Trials
Counties are resistant to being instructed by the legislature to solve their own problems, especially so via the wheel tax.
Bartholomew County expressed opposition to HB 1461 just days after it appeared on the House docket. Bartholomew County Commissioner Larry Kleinhenz (R) described the bill’s “Local Option Highway Vehicle Tax” provision as “atrocious” and “punishing.” In 2017, his county considered implementing its own wheel tax but ultimately decided against it, as it believed that roads and infrastructure were not its biggest financial burden. Instead, county officials chose to adopt a local option income tax, which offers the county greater flexibility in managing its finances. A similar song and dance happened again in 2009, resulting in an economic development income tax.
Notably, a former House Roads vice chair, Rep. Ryan Lauer (R) of Columbus, disagrees with Chair Pressel publicly in media interviews, and instead aligns with constituent Kleinhenz’s views on HB 1461. “My understanding is that it does have provisions to require local jurisdictions to have a wheel tax in place to have access to Community Crossing grants,” Rep. Lauer tells Mark Webber of the Columbus Republic. “I’m against it. I don’t think it’s appropriate to tie state funding to a local tax.” While Rep. Lauer agrees that the FIRSST infrastructure funding deficit is a real concern, he emphasized that he thought the wheel tax measure was “a bridge too far.”
AIC’s Hoff also expressed uncertainty about the wheel tax adoption, implying the benefits for counties weren’t reaching the counties themselves as most express disapproval and likely would not implement the tax.
Since some officials are tossing around adjectives as strong as “punishing”, let’s clear up what a wheel tax actually is. The county-wide, opt-in tax looks very similar to a local registration fee that applies to any vehicle NOT already taxed through the excise tax. That means buses, RVs, semi-trailers, tractors, ORVs, and trucks would all pay up. Depending on certain factors like height and weight of the vehicle, rates can vary between $5 and $40 per vehicle, per year.
Where Do We Go From Here?
In the midst of the wheel tax debate, Knox County Commissioner Kellie Streeter (R) proposed a compromise: letting the wheel tax be highly customizable per community to enable more local control. “We want to help ourselves, and we know you want us to help ourselves, so let us do that,” she implored. Rep. Pressel commended her, stating that she was the first person to bring a solution to the table regarding local efforts – versus only protesting with no real suggestions.
Ironically, Commissioner Streeter almost was on the other side of the table this year, placing second in an HD 45 Republican primary race, trailing Rep. Bruce Borders by about 325 votes whole leading former Rep. Jeff Ellington (R) by about 700 votes.
This is the sort of productive back-and-forth that will likely decide where HB 1461 ends up.
Although HB 1461 is engendering controversy from those affected, it’s not as if Rep. Pressel pulled this out of thin air. The House Committee on Roads and Transportation chair has been working with other lawmakers and stakeholders for two years, trying to find solutions. Rep. Lauer confirms that Rep. Pressel is very willing to consider amendments, and doesn’t consider the expansive bill a done deal by any means. Unlike many of his colleagues, the chair doesn’t seem to be concerned about who claims ownership of the good ideas. He is well aware that many items on his buffet will prove unpopular, and, as he puts it, prioritizes creating “good policy” above all else. By that, he means if a provision encounters too much criticism and doesn’t garner actionable tweaks to silence those, it will likely be amended out of HB 1461.
While it’s hard to find an option that doesn’t come with controversy attached, it’s very unlikely that the bill is completely thrown out. HB 1461 definitively has the strong support of Secretary of Transportation and Infrastructure Matt Ubelhor – meaning HB 1461 has the support of the Governor – as the secretary reiterated no fewer than four times during January 30’s House Committee on Ways and Means budget meeting. Most legislators recognize that something needs to change – it’s just a matter of deciding what that is.
Bear in mind that deadlines are looming, though. Chair Pressel did not bring the bill for a vote in House Roads at its meeting this week. The committee report deadline for the House and Senate is February 17 . . . so there is only about a week left for lawmakers to make any changes to measures potentially held up in committee, like HB 1461, and push them through for a full chamber vote.