Road Funding Bill Now Travels to Senate

Chamber-supported HB 1002 was amended last week on the House Floor and then passed 61-36 largely along party lines and is now up for consideration by the Senate.

The floor amendment prohibits any new toll road within 75 miles of any other toll road, terminates the gas tax indexing after July 2024 and allows additional time for public comment before a significant road project begins. Earlier, changes were made to the bill to have all sales taxes collected on fuel costs to be designated for roads (currently it’s only a penny of the seven-cent tax) starting in 2018 versus a phase-in of the sales tax to roads over three years through 2021. This creates a potential general fund budget deficit of over $300 million a year that must be addressed, either through budget cuts or other identified revenue sources. Moreover, the Chamber will continue to advocate for a strong, user-fee based model to address Indiana’s $1.2 billion per year road funding gap.

Call to Action: Connect with your state senator via our grassroots page. Let them know today that long-term funding is important to you and your company!

Real Journey Begins for Transportation Funding Bill

During a six-hour hearing before the House Roads and Transportation Committee, there were some technical changes made in the bill and the annual increase for the fuel tax was capped to no more than one cent per year. Chamber President Kevin Brinegar provided testimony that this bill was about “revenue recovery” on the lost buying power of the gas tax since it was last raised. (Read the Chamber’s full testimony.) That lost revenue, plus better fuel economy means less money for roads. The Chamber is grateful to board members Drew Coolidge with SIRVA (moving company) in Fort Wayne and John Thompson (owner of several Indiana-based businesses) who testified how better roads impact their business, their communities and Indiana. House Bill 1002 will be considered in the coming weeks by the Ways and Means Committee before the desired House floor vote.

Call to Action: Connect with your state representative via our grassroots page. Let them know today that long-term funding is important to you and your company!

Get Your Motor Running for Transportation Funding

The long-awaited road funding bill (HB 1002, authored by Rep. Ed Soliday) arrived during the first week of session. It addresses the structural deficit of $1.2 billion per year for Indiana roads. The bill includes many good things that the Chamber supports; it is user-fee based and data-driven. While the bill will have changes during the next four months, we will work to support its basic concepts. The state’s situation: Over the years, technology (that led to better gas mileage) and inflation have combined to erode Indiana’s road maintenance dollars. Also, the last time the gas tax saw an increase was 2003. There will be a major hearing on this bill by the Roads and Transportation Committee on January 25 and the Chamber will be there to formally advocate its full support.

HB 1002 provides for a one-time fuel tax rate increase of 10 cents per gallon on gasoline  currently $0.18), special fuel tax (currently $0.16) and motor carrier surcharge tax (currently $0.11.) It also does the following:

  • Provides for an annual rate increase in fuel tax rates based on an annual index factor
  • Increases alternative fuel decal fees by 50%
  • Establishes a $15 transportation infrastructure improvement fee that applies to all motor vehicle registrations
  • Requires a person who registers an electric vehicle to pay a supplemental registration fee of $150 with an increase every five years based on an index factor
  • Provides that the gasoline use tax is distributed to highway funds over a phase-in period
  • Repeals restrictions on when a tolling project can be undertaken
  • Requires the Indiana Department of Transportation (INDOT) to seek a Federal Highway Administration waiver to toll interstate highways
  • Permits INDOT to approve certain railroad crossing projects and authorizes the Indiana Finance Authority to finance an approved project subject to a maximum annual debt service limit of $10 million
  • Makes various changes to the transportation funding exchange program between the state and counties and municipalities

Chamber Comments on Recommendations from Transportation Funding Task Force

Indiana Chamber of Commerce President and CEO Kevin Brinegar comments on the release of recommendations from the FIRSST (Funding Indiana’s Roads for a Stronger Safer Tomorrow) task force:

“The task force has provided additional emphasis on three key priorities: today’s revenue sources are not adequate; long-term funding is required to meet both current maintenance and future new construction needs; and new funding should be based on a user-fee approach.

“We support the work of the task force and are prepared to assist legislators and the Holcomb administration in passing data-driven legislation that will help drive Indiana’s economic future. Reliable transportation infrastructure is critical for companies and the jobs they provide across the state.”

Indiana Chamber Unveils Top Legislative Priorities for 2017

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Senate Democratic Leader Tim Lanane (right) speaks during Monday’s Indiana Chamber Legislative Preview. He was joined during the panel discussion by Senate President Pro Tem David Long, as well as House Speaker Brian Bosma and Minority Leader Scott Pelath. Our VP Caryl Auslander moderated.

Long-term transportation infrastructure funding, expansion of state-funded preschool to children from low-income families and strategies to reduce the state’s smoking rate are among the Indiana Chamber of Commerce’s top priorities for the 2017 session.

These objectives were announced at the organization’s annual legislative preview in Indianapolis today. The event sponsor was Ice Miller LLP.

“Based on studies, reports and simply travelling across the state, it’s pretty apparent that what we desperately need is a long-term, sustainable, transportation infrastructure funding plan,” offers Indiana Chamber President and CEO Kevin Brinegar.

He believes whatever strategies are ultimately settled on to fund the state’s road and bridges, two factors must be taken into consideration.

“We need to completely fund both maintenance needs and important new projects, and ensure that every user pays their fair share.”

Specific funding strategies the Indiana Chamber could support include: indexing the fuel excise taxes/fees to inflation; raising fuel excise taxes/fees; charging fees for alternative-fuel vehicles (which aren’t subject to the regular fuel tax); tolling a major interstate; and dedicating all of the sales taxes on fuel to infrastructure (the current model allots a penny with the other six cents going to the state’s general fund).

Brinegar notes that the Indiana Chamber would support replacing any revenue lost to the general fund with another revenue source so that the general fund is left whole.

Education is also high on the organization’s agenda.

“We are encouraged that virtually everyone involved sees the need to increase state-funded preschool,” Brinegar begins. “The Indiana Chamber will be advocating that disadvantaged youngsters take priority for the state’s limited dollars.

“We want to see legislators focus on fiscal responsibility, ensure preschool programs are of high quality and adopt a mixed delivery model that includes public schools, Head Start programs, licensed family and center-based childcare, as well as community-based organizations. All of those things are vitally important.”

The Indiana Chamber is part of the All IN 4 Pre-K coalition.

Separately, the Indiana Chamber is supporting suitable testing for students and accountability measures for all involved in the education process.

“Clearly there have been issues with ISTEP testing and the communication of result expectations based on the state’s new college and career-ready standards,” Brinegar says. “But the fundamental importance of measuring students, teachers and schools remains. That’s how we can predict student progress, rate teacher effectiveness and compare and contrast school performance relative to state and national peers.”

Indiana ranks 44th in the nation for highest percentage of smokers. Brinegar stresses that the increased health care costs associated with this level of smoking has the attention of employers.

“These workers are less healthy, have higher insurance premiums and miss more days on the job – and some are not able to work at all.”

The Indiana Chamber, a member of the new Alliance for a Healthier Indiana, is backing a comprehensive approach to reducing the state’s smoking rate. The proposal includes: raising the price of cigarettes via a tax increase; funding a more robust smoking cessation program; increasing the smoking age from 18 to 21; and repealing special privileges for smokers (that prohibit employers from asking possible new hires if they smoke).

“Right now, Indiana is spending substantially more on smokers with health issues who are on Medicaid than it is taking in via cigarette tax revenues. For every pack sold and taxed at 99.5 cents, the state spends at least $15.90 in related health care costs,” Brinegar states. “Obviously that’s not a sustainable tradeoff and needs the state’s attention.”

In the summer, the Indiana Chamber more closely aligned with the state’s technology industry, forming the Indiana Technology & Innovation Council to facilitate better communication and coordination among interested parties.

According to Brinegar, a key focus is public policy so technology leaders can present a strong, unified voice at the Statehouse. Out of the gate, the goal is to “make technology innovation an integral part of the state’s identity.”

Brinegar says: “Indiana is already fostering an impressive entrepreneurial spirit and becoming a technology hub in the Midwest. But we need to better support our technology successes and build on them. After all, our technology efforts now provide tremendous support to the agriculture, logistics and manufacturing sectors in the state – three of our main cogs.”

The Technology and Innovation Policy Summit on December 15 will unveil all the council’s legislative goals.

A complete rundown of the Indiana Chamber’s 2017 key legislative initiatives (top priorities and additional areas of focus) is available at www.indianachamber.com/priorities.

Also at the legislative preview event, five state legislators were honored as Indiana Chamber Small Business Champions “for their hard work and dedication to improving Indiana’s small business climate.” This award is based on voting and advocacy during the past legislative session.

The 2016 Small Business Champions are: Sen. Travis Holdman from Markle, District #19; Sen. Tim Lanane from Anderson, District #25; Rep. Matt Lehman from Berne, District #79; Rep. Karlee Macer from Indianapolis, District# 92; and Rep. Ed Soliday from Valparaiso, District #4.

Recap of the Indiana Chamber’s Top 8 legislative priorities:

  • Support establishing a long-term sustainable funding stream for the state’s roads, bridges, etc.
  • Support the expansion of publicly-funded preschool initiatives for children from low income families
  • Support suitable testing for students and accountability for all involved in the education process
  • Support comprehensive approach to decreasing the state’s smoking rate
  • Support a statewide water policy to assure future resources and our economic prosperity
  • Support making technology innovation an integral part of the state’s identity
  • Support maintaining and enhancing our attractive tax climate
  • Support a work share program that will allow employers to maintain a skilled stable workforce during temporary downturns

Go Vote! Then Let’s Move from Politics to Policy

Indiana Chamber of Commerce President and CEO Kevin Brinegar comments on the election aftermath:

“We probably have just witnessed the most bizarre and bruising election of our lifetimes. It’s critical to move on quickly from any bitterness of the campaigns or results and come together as a state and nation.

“We need lawmakers to concentrate on the business of governing and moving our economies forward. Let’s focus on producing positive outcomes and Indiana continuing to set an example as a state that gets things done.”

Beyond the Bicentennial: Our Letter on Infrastructure, Energy and Telecommunications

The following is the third in our series of Beyond the Bicentennial letters, addressed to gubernatorial candidates. Read them all at www.indianachamber.com/letters.

Dear Mr. Gregg and Lt. Gov. Holcomb:

For Indiana to be the state we all want it to be – one that inspires business location and expansion, brings good-paying jobs to Hoosiers and allows for a high quality of life – a solid infrastructure framework must be in place that reflects both present conditions and is prepared for future developments.

The Superior Infrastructure economic driver in our Indiana Vision 2025 plan champions that belief, with goals regarding transportation, energy, water and telecommunications – all things sometimes taken for granted but inherently critical to running a business and enjoying the comforts of daily life.

Reliable roads and bridges doesn’t seem like a lot to ask for (especially for the Crossroads of America), yet it takes significant investment to keep them functioning, make enhancements and build anew. Frankly, our state has not done enough in recent years and has thus fallen behind.

In 2016, the state Legislature opted to provide short-term funding with a task force set up for the next phase. We all should know at this point – based on studies, reports and simply travelling across the state – that what Indiana desperately needs is a long-term, sustainable, strategic policy plan. One that lasts decades, not a few years or election cycles. And above all, it must be based on the principles that enough revenue is raised to completely fund both maintenance needs and important new projects, and that every user pays their fair share.

There are a number of strategies that should be on the table – any or all of which the Indiana Chamber could support:

  • Index fuel excise taxes/fees to inflation
  • Raise fuel excise taxes/fees
  • Charge fees for alternative-fuel vehicles (which aren’t subject to the regular fuel tax)
  • Tolling a major interstate
  • Dedicate all of the sales taxes on fuel to infrastructure (the current model allots a penny with the other six cents going to the state’s general fund), and replace the revenue lost to the general fund with another revenue source so that the general fund is left whole

But, realistically, how we get there matters far less than advancing to the point where we have a robust transportation fund. It’s time to finally address this in 2017 – hopefully in a bipartisan way – before it becomes a crisis.

For decades, many companies have located in Indiana because of its adequate, reliable and affordable supply of electricity. But now that coal – Indiana’s most plentiful energy source – has come under frequent attack by the Obama administration, affordability is starting to go out the window. And how long will it be before businesses and jobs go with it?

Unfortunately, Indiana is to some degree at the mercy of the incoming president and the Environmental Protection Agency. However, we can take additional proactive steps at the state level to combat their actions against coal.

One avenue is to focus on diversifying Indiana’s energy mix with an emphasis on clean coal, natural gas, nuclear power and renewables. Development and execution of a statewide energy plan (which does not currently exist) is essential.

Turning the attention to water, we need to finish the good work that stemmed from the Indiana Chamber’s 2014 water resources study and legislation carried by Sen. Ed Charbonneau and others to develop and implement a statewide water resources plan.

We must ensure that future water resources are available – our ability to effectively compete with other states depends on it. And we are approaching the point where research and data collection should soon transition to action. Leadership must be shown by the next Governor to help spearhead the process.

While the need for water has been obvious since the beginning of time, the advent of broadband and its economic significance is a much more recent development. It wasn’t that long ago that broadband was spoken about only in terms of faster and more reliable internet entertainment. But today, and in the future, its business, medical, security and quality of life impacts are paramount.

Legislation in 2015 that created the Broadband Ready Communities Development Center assists rural locales in working through the barriers they might have to broadband investment by a provider.

But not enough is happening and not quickly enough. We must find more ways to bring the most rural parts of Indiana up to date technologically to help reverse their downward population and economic trends.

That sentiment – being more aggressive – easily could be said for all of these infrastructure components. If elected Governor, we strongly encourage you to make that shift and put a greater priority on these vital issues.

Sincerely,

Kevin M. Brinegar
President and CEO
Indiana Chamber of Commerce, representing 24,000 members and investors statewide

Logistics, Infrastructure Take Center Stage at Summit

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Hoosiers don’t take lightly the title “Crossroads of America.”

It’s a moniker we’ve earned honestly: The state is in the heart of the Midwest and is one of the top manufacturing states in the country. Going hand-in-hand with manufacturing success are logistics and distribution, and the ability for Hoosier companies to move their goods efficiently and through cost-effective means.

We move products by sea, rail, over the road and through the air to national and global locations. More than 700 million tons of freight is moved annually in Indiana, according to the Indiana Department of Transportation.

As part of the ongoing Beyond the Bicentennial campaign, the Indiana Chamber of Commerce will release an open letter detailing the necessary policy positions for advancing the state’s Superior Infrastructure, as outlined in the Chamber’s long-range economic development plan Indiana Vision 2025. The letter, to be published on Sept. 27, will be the third in a series of four letters addressed to the major party gubernatorial candidates. Each letter details policies impacting the four drivers of Indiana Vision 2025. Additionally, the Indiana Logistics Summit will return to downtown Indianapolis on Nov. 16-17.

Keynote speaker Paul N. Jaenichen, Sr., United States Maritime Administrator, will address attendees on Nov. 17. Jaenichen was appointed to his position by President Obama in 2014 and is a retired career naval officer. He was a nuclear trained Submarine Officer in the U.S. Navy for 30 years, and will be speaking about the National Maritime Transportation Strategy and Marine highway projects.

New to the summit will be a series of educational breakout sessions. These will feature speakers on topics such as: rail, air cargo, barge and trucking industries; going global; innovation; policy; and workforce.

Early discounted registration is open until Sept. 30 (though registration will continue after that date). Visit the web site at www.indianalogistics.com for more information and to register.

Road Funding Committee Discussions Ramp Up

9809397An in-depth interim summer study committee on road funding (called FIRSST) held its second meeting last week. This was an input session that focused on how Indiana’s road conditions and funding compare to other states.

There were several informative presentations from several different groups including Conexus and the National Conference of State Legislatures. Points of interest from the discussion:

  • For the U.S., average funding sources for highways and transit are 25% federal, 40% state and 35% local.
  • Indiana’s deficient roads cost $391 per motorist per year. This includes flat tires, bent rims and other costs.
  • Some 16% or 9,965 miles of Indiana’s roads are considered in poor condition; that ranks us third among six Midwestern states.
  • A total of 10.2% or 1,944 Indiana bridges are considered deficient in quality; that ranks us second among six Midwestern states.
  • Investment in road infrastructure is declining, even when adjusted for inflation.
  • There are 54 potential funding sources for road funding ranging from fuel taxes to parking meters.
  • Fuel taxes have not kept up with the infrastructure needs. Automobiles are more fuel efficient and inflation has been eating away the buying power of gas taxes. Indiana last raised its gas tax in 2003 and it is not indexed for inflation.
  • As electric cars become more popular, very few states – including Indiana – impose fees for their use of roads. Of the 10 states that do, the fee ranges from $47.50-$200 per year.
  • Of the 50 states, 36 – Indiana among them – have toll roads.

The Indiana Chamber will continue to encourage the development and implementation of fiscal systems to support the array of transportation infrastructure projects critical to economic growth. The next FIRSST meeting is scheduled for September 29.

Future Road Funding: Smooth or Bumpy?

36601064This summer, as we wander Indiana for work or pleasure, motorists experience both how good and bad Indiana’s road infrastructure is. The real issue is Indiana’s road funding mechanisms are in need of modernization to keep up with today’s demands.

To address the issue short and long term, several months ago the Legislature passed and the Governor signed two important bills on road funding, HB 1001 and SB 67. Combined, the bills did the following:

  • Provided a total of $689 million of additional funding over the next four years to Indiana’s local governments for their road funding needs.
  • Provided an additional $228 for state road funding in 2017. (Funding for this and the above came from a combination of using some of Indiana’s budget surplus, providing revenue from local option income tax collections and directing some of the sales taxes collected on fuel to road funding.)
  • Provided Indiana counties the option to double their wheel tax and for municipalities with a population over 10,000 to establish a wheel tax. If eligible local governments choose to do this, they can raise up to an additional $376 million a year.
  • Established the FIRSST (Funding Indiana’s Roads for a Stronger and Safer Tomorrow) Task Force to develop a long-term plan for state and local roads and bridges, and develop funding mechanisms for the various components of the plan.

The FIRSST Task Force has a lot of work to do before the end of this year. The goal is to present a plan that will set the stage for what might take place during the 2017 legislative session. Its 16 members will verify the costs of road maintenance needs, look at current revenue streams and determine what current and new ideas are viable for the future. This is important given that the primary funding mechanism, the 18-cent-per-gallon gas tax, is not keeping up with the cost to maintain state and local roads, let alone build new ones.

In a recent Chamber infrastructure policy committee meeting, Senators Luke Kenley (R-Noblesville) and Brandt Hershman (R-Buck Creek) indicated their commitment to achieving a solid and sustainable long-term solution during the 2017 session. Given the Indiana Chamber’s Indiana Vision 2025 goal area of “Superior Infrastructure”, we will play an active role in this discussion.