Buckle up – everything transpo-related you can expect this session
We’ve been predicting the major transportation issues to watch for in the 2025 legislative session for months. Through one-on-one interviews; our coverage of the Dentons Legislative Conference in Association with Hannah News Service; the Funding Indiana’s Roads for a Stronger, Safer Tomorrow (FIRSST) final task force report; and what some lawmakers have been telling constituents Back Home, we’ve found that many of those hypotheticals will indeed become major topics of discussion – with a few surprises in the mix.
As we’ve noted, road funding will be one of the most relevant legislative topics before the General Assembly in 2025. A few potential solutions on the horizon include raising the gas tax, altering or dismantling state grant matching program Community Crossings, and diversifying revenue streams.
Let’s start with the most controversial solution, shall we?
Lawmakers can’t currently agree on whether a major move is needed to sustain Indiana’s roads . . . much less the necessity of a tax-based one. We told you in our last issue that at an event in Columbus, Sen. Greg Walker (R) of Columbus contentiously asserted that he’s “not sure Indiana has a road funding problem.” Rep. Ryan Lauer (R) of Columbus (a former vice chair of the House Committee on Roads and Transportation) plainly stated that he “doesn’t want to see new taxes” as statewide mandates. And, when asked at LegCon if tax (including gas use tax) increases may be on the table this year, Sen. Travis Holdman (R) of Markle, who holds sway in current tax discussions as chair of the Senate Committee on Tax and Fiscal Policy, decisively answered: “No.”
Many legislators are signaling they won’t even entertain the notion of raising taxes.
Senate Committee on Homeland Security and Transportation Chair Mike Crider (R) of Greenfield reflects on his experience from 2017, when he helped pass the last gas tax bill that raised the tax by 10 cents. He has “learned not to predict the actions of his legislative colleagues,” so he expects the legislature to “have a variety of ideas.” According to Sen. Crider, the road budget will ultimately be determined by “willpower.”
He’s not “relishing the conversation,” adding that “[gas tax] is one of the most difficult bills that we deal with.” “If you’re talking about raising any fees, it’s always a problem. Always is,” Sen. Crider admits.
“I’m not tax-adverse,” continues the senator. “I think honest discussion and transparency about what the need is and then following through and collecting a fee and using it for what you said you were going to use it for … is something most members of the public understand and appreciate.”
Sen. Crider’s prescription for the inevitable pushback from colleagues is to “do the best with the information you have and then take whatever consequences are at the end … because, otherwise, you really wouldn’t do anything in the chamber.”
Crider also notes that “it’s a bad idea to double down on using simply gas tax” to prevent Indiana’s roads from crumbling, believing that “we’d just end up in the same situation going forward … cars are going to get even more fuel efficient.”
2017 Time Warp
The gas tax was last raised in 2017 through HEA 1002-2017, which authorized a yearly increase of up to 1¢ in the base gas tax from 2018 to 2024. The measure was extended until 2027 in a 2023 amendment.
Our Hannah News Service sister newsletter INDIANA LEGISLATIVE INSIGHT covered the bill’s passage in 2017. When the inevitable pushback arose, particularly spurred on by Republicans “who might question … more government involvement in the roads and infrastructure sector from an ostensibly conservative Republican governor and legislature,” Governor Eric Holcomb (R) replied that “in some key areas, ‘Government has a role; like it or not.’ He tells people that if they want their roads maintained, new roads, a fourth port, and the South Shore to be double-tracked, government must take the lead and have the resources.”
To clarify, Governor Holcomb wanted to avoid discussions on toll increases in 2017 “which he’s really uncomfortable with, even as he is also clearly uncomfortable not ruling it out entirely,” and wasn’t in love with raising the gas tax, even as he left both options on the table.
Regardless, questions abounded, in and out of the State House limestone, covering the “how … who, what, where, and when.” The biggest point of emphasis was on the “how:” local versus state funding, eligible projects, impact on Hoosiers, prioritization, timing of cash flow, and more. This session nearly a decade later is likely to engender similar questions, both in scope and volume.
Odds are high there won’t be a champion for the numbers hike this time around, either, but rather a slow realization that the legislature might not have any choice but to consider it. Medicaid inflation (also covered in depth this month by INDIANA LEGISLATIVE INSIGHT) that caused handwringing after the recent revenue forecast will likely overshadow the gas tax issue to a certain degree in the realm of Hard and Unpopular Conversations Legislators Have to Have This Session – it’s hard to predict what kind of impact a packed budget session will have on any given issue.
When asked whether the gas tax conversation will echo the one in 2017, Sen. Crider says no, not quite: “If we continue to only use gas tax as a solution, the number is so big that nobody would ever support it …. I think that it will be a small portion of what actually passes.”
The Hancock County lawmaker adds that he is concerned about media coverage of gas taxes in Indiana, lamenting that there are always reports on “when it goes up, but not when it goes down.”
House Committee on Roads and Transportation Chair Jim Pressel (R) of Rolling Prairie speaks similarly: “The media spin on [gas tax fluctuations] … it’s sales tax, and [the fluctuations] aren’t something the General Assembly is doing.”
When the predominant rhetoric is that the legislature is playing yo-yo with Hoosier dollars every month, the public is bound to be more reactive to changing the base number.
How Urgent is This Problem?
Sen. Crider, Rep. Pressel, and outgoing Indiana Department of Transportation Commissioner Mike Smith have all reiterated that Indiana’s road funding is not “a can we can kick down the road,” to borrow Rep. Pressel’s verbiage. Likely spooked by the FIRSST $2.4 billion shortfall estimate to maintain the current infrastructure, most lawmakers seem to agree that a plan for a sustainable funding stream needs to materialize this session.
“We can’t pass that tax load to the next generation, to our children,” Sen. Crider asserts. “If we don’t do something meaningful now, it’s going to be a problem.”
FIRSST co-Chair Jeff Thompson (R) of Lizton had this to say about Hoosier roads: “If we don’t take care of what we currently have, it’s a form of debt, and I’m not one that just loves debt,” Rep. Thompson asserts. He adds, “If we do nothing, we’re borrowing and putting the burden on future taxpayers. And so I … we must do this. It’s hard decisions, but it’s the best thing long-term for our state.”
Notably, Rep. Thompson chairs the House Committee on Ways and Means, making him a relevant player for most topics in a major budget session.
So, this problem is immediate and pressing. That doesn’t mean INDOT is going to immediately reevaluate all Hoosier roads and infrastructure.
“INDOT is in a tough spot .… Most of their [design manual] has been on the books for years,” Sen. Crider acknowledges.
There are many steps before INDOT can create a deliverable for a project; re: that Big Red tape we mentioned earlier. Some of those steps can take years. That makes it difficult both to plan for the future and fully grasp the current state of our roads and infrastructure.
Community Crossings Makeover
From the initial FIRSST task force meeting, Democrats have been pushing for state grant matching program Community Crossings to be reevaluated.
First created in 2016 by the General Assembly, Community Crossings aimed to better support Indiana’s smaller counties and cities by matching up to $1 million in funding when localities invest in road and bridge repairs. If the county’s population is less than 50,000 or the town’s population is fewer than 10,000, CC will match at 75/25 percent. If the county’s population tops 50,000 or the town’s is more than 10,000, CC matches at 50 percent. INDOT offers two calls for projects each year, in January and July.
While it’s undeniable that Community Crossings was not “ill-conceived,” as Rep. Ed Soliday (R) of Valparaiso put it (while rallying against some of the assertions from Sen. Fady Qaddoura (D) of Indianapolis at the first FIRSST task force meeting), and has helped many Hoosier communities maintain infrastructure where it otherwise may have crumbled, the problem with the program now is two-fold.
“We’re starting to notice that, increasingly, some of the smaller communities are having difficulty even coming up with the 25% match for some projects and so, I mean, I can see maybe some idea for adjustment with that,” Sen. Crider explains.
If you listen to the Dems, the more pressing issue is that bigger communities aren’t getting enough dollars to complete their infrastructure projects under the grant matching program, despite seeing more traffic than rural communities.
Indianapolis is the main concern, so it’s unsurprising that Sen. Qaddoura has voiced this concern the loudest so far.
After a small disagreement that had to be “taken offline” with Rep. Pressel, it seems that Sen. Qaddoura’s concerns are indeed being considered post-revenue forecast and FIRSST report. Both chairs Crider and Pressel believe that, while CC doesn’t need to and should not be dismantled, it does need to be substantially reevaluated as the infrastructure purse strings tighten.
Rep. Pressel, while deeming CC a “great program, a very good program,” implies it may be time to “give it another look.” Sen. Crider suggests that there’s a “willingness” to discuss Community Crossings and consider “real need,” ensuring that Indiana isn’t spending money based on “somebody’s opinion that this road looks bad.”
Rep. Pressel floated separating Community Crossings into tiers, diminishing matching requirements for smaller communities while hiking up the amounts larger communities are eligible for. He also mentioned the possibility of reallocating township money.
In our most recent issue, your favorite transportation newsletter mentioned that Rep. Lauer (R) of Columbus also had this to say about a mandatory wheel tax to make communities eligible for Community Crossings funding: “Strong-arming local jurisdictions to implement a new tax to receive more tax money? That’s come up before; that’s a bad idea,” the Columbus Republic reported.
Rep. Pressel may bring it up once again, as he’s also hypothesized about requiring localities to implement their own set of tools – like the wheel tax – to obtain state funding –such as Community Crossings.
“Jim, How Many More Roads Are You Gonna Do?!”
Rep. Pressel has been thinking about how to solve Indiana’s road funding problem for years now.
“People ask me, ‘Jim, how many more roads are you gonna do?’” Pressel laughs. “We need to focus on maintaining what we have.”
Rep. Pressel, does, however, heartily espouse expanding the capacity of I-70 and I-65. If we’re quoting INDOT’s Smith and separating “wish list items” from “nonnegotiables,” this interstate expansion falls into “wish list items” – but just barely, and it’s on both Crider’s and Pressel’s lists. If the transportation conversation has room to expand beyond road funding woes, this is a specific project that will be advocated in the House and Senate.
With that said, Rep. Pressel concedes that “economic development needs to play a bit of catch-up with the infrastructure projects.”
Regarding potential solutions, the legislator aims for all options to adopt a “user pays mentality” to maximize road funding revenue. Currently, some road users do not contribute to the upkeep of Hoosier roads yet still cause damage to state infrastructure. For instance, large freight trucks passing through
the Crossroads of America often don’t even purchase gas in Indiana.
A key goal of this legislative session, from everything we’ve heard, is to identify ways to ensure that users pay for the costs associated with Indiana’s infrastructure while reducing our overall dependence on fuel tax revenue.
An “a la Carte Buffet” of Options
Rep. Pressel believes a “robust conversation about road funding” is where any nuanced discussion on serious legislation needs to begin. “We’ll toss in some elements of an a la carte buffet; some of it will make it into legislation.”
Pressel and Crider agree on prioritizing a set of diverse options to present to the General Assembly. There’s a good reason for this – the more bills you throw at the wall, the more likely that something will stick (or end up memorialized in a conference committee draft or the budget!).
The smallest item in Rep. Pressel’s buffet of options is electric vehicle registration price hikes. Pressel and Crider both caution legislators to view the EV band-aid as “an aside to everything else,” and not a primary solution. Neither the Senate nor House committees appear likely to tackle EV wrangling this session substantially. Legislative concerns are more focused on hybrid vehicles that are pioneering new standards for fuel efficiency, thereby eliminating the need for motorists to spend cash at the pump frequently.
Pressel acknowledges, “I think the EV stuff is going to be … a very small part of the equation. Very small.”
Both Pressel and Crider assert that the Corporate Average Fuel Economy (CAFÉ) standards, which regulate how far a vehicle can travel on a gallon of fuel and are intended to reduce energy consumption, are a more relevant part of the fuel efficiency discussion than EVs.
For now, the House has only released its first slate of bills, leaving the nuance of that legislative buffet a little hazy. While full details aren’t available, we can see that there are two Roads and Transportation-related bills on the docket: HB 1057, authored by Rep. Cindy Ledbetter (R) of Newburgh, which addresses automated tractor trailers, and HB 1077, authored by Rep. Greg Porter (D) of Indianapolis – a bill restricting sale of information collected by the Bureau of Motor Vehicles.
Lawmakers aren’t keen to proffer more information on specific legislation we can expect, either, especially considering that many of the proposed road funding solutions may prove unpopular. “I hate to predict significant changes,” Sen. Crider hesitates. “I think we’ll throw out a variety of ideas and see what the members will support and coalesce around.”
Still, Rep., Pressel also believes that every legislator should have the chance to weigh in or present an idea. “So somebody [asked last session,] was this a waste of time on hearing bills that you’re never actually going to take a vote on? And I say no, it’s not a waste of time. It’s kind of setting the stage … find out who’s opposed to it, who’s in favor of it, who the stakeholders are, and give it an opportunity to simmer just a little bit and see, okay, how do we get [this] to good policy or do we even need to address it? So I think it’s good time spent.”
A Handful of Wild Cards
Governor-elect Mike Braun (R) has already promised a more direct approach in working with the General Assembly as he takes leadership of the state . . . because after all, he used to be one of them. Sen. Crider acknowledges that “We [don’t] even know for sure where the incoming governor [is at] and what his appetite is for … supporting a program. This is going to be really interesting.”
Best laid plans and all that.
While every legislator we’ve talked to eagerly says they’re ready to work with (if not for) Gov.-elect Braun, Rep. Pressel believes they are like-minded when it comes to the transportation sector – at least, insofar as that “user pays” mentality. Braun has espoused similar notions in recent press conferences, so initial conversations have us imagining he wouldn’t stand in the way of increasing the gas use tax or tolling amounts, no matter how unpopular of a decision that may end up being among his constituents.
Then there’s the incoming governor’s pick for secretary of transportation, former Republican lawmaker Matthew Ubelhor. We’ve been told that the secretaries will let the governor-elect take center stage while he wrangles and solidifies his new Cabinet. In other words, it’ll be a minute before Ubelhor himself speaks in depth about his new role.
We do, however, know a few things about Ubelhor from his five years as a House member. Bills he sponsored imply the expansion of public transportation and school zone traffic safety are areas of interest. Back in 2012, our sister newsletter INDIANA LEGISLATIVE INSIGHT relayed that the representative introduced a measure to let Greene County residents “participate in a public question referendum on a countywide zoning/land use management ordinance.” Greene County was one of only eight counties that did not have a land use planning ordinance in 2012 and then-Rep. Ubehlor’s concerns at the time were triggered by nearby I-69 development and the residents’ lack of ability to respond.
Rep. Blake Johnson (D) of Indianapolis heavily contributed to last year’s transportation conversation, and yet was, as he put it, “summarily dismissed from the Roads and Transportation committee” by Rep. Pressel – a statement made tongue-in-cheek from Johnson; the two appear to be affable colleagues. Rep. Johnson fired back a friendly shot by pointing out that Rep. Pressel “does not drive a Prius … he drives a very large truck” during a conversation about hybrid vehicles. Regardless of his camaraderie with Pressel and presence on the Dentons Legislative Conference roads panel, it doesn’t look like Rep. Johnson will have much to do with transportation this year.
As we previously mentioned, Sen. Qaddoura is likely to play a role, given his outspoken opinions and presence on the FIRSST task force. Another one to watch is newcomer Rep. Wendy Dant Chesser (D) of Jeffersonville. On October 1, Rep. Dant Chesser, while still uncertain as to whether she’d beat two challengers to retain a suddenly vacant Democratic seat, threatened legislative action against tolling agency RiverLink. She applied pressure on INDOT to force RiverLink to find long-term solutions to an excessive amount of customer complaints after a fraught service provider shift. As someone who lives and breathes regional economic development and related infrastructure concerns in her day job, Rep. Dant Chesser – a former Indiana Department of Commerce official a few decades back – will likely have a lot to say in the House Committee on Roads and Transportation . . . and she’s someone who is poised to work effectively across the aisle.
To Wrap Up
Something to remember: Senators and representatives want better, easier, safer, cheaper transportation, just like the rest of us. Sen. Crider looks forward to spending the holidays with his six grandchildren and wife at home, but “I told my wife, look around and find some place for us to go, but you can’t fly anywhere [right now]! It’s like $1,200 to fly to Florida!”
The fact that Indiana’s roads and infrastructure affect everyone, from motorists to pedestrians to bicyclists to scooter users, will create some common ground for the challenging conversations this session will bring.
One item where bipartisanship could come into play is concern over road rage incidents, with law enforcement statistics showing some 250 road rage shootings and six road rage-related homicides in Central Indiana alone this year through November. There are some murmurs about addressing this legislatively – including, perhaps, increased criminal penalties for such incidents and expanding the traffic INDOT traffic camera network, particularly on I-465.
One thing is certain: now armed with the FIRSST task force recommendations, both the Senate Committee on Homeland Security and Transportation and the House Committee on Roads and Transportation will have a lot of work to do.