Indiana Gov. Mike Pence (R) signed into law on March 23 a set of bills that will commit $1.2 billion to state and local transportation infrastructure. The legislation will:

  • Transfer state reserves exceeding 11.5 percent at the end of Fiscal Year 2016, with 55 percent of that revenue ($226.1 million) dedicated to the State Highway Fund and 45 percent ($185 million) to the Local Road and Bridge Matching Grant Fund.
  • Divert 1 percent of the 7 percent state sales tax on gasoline to the State Highway Fund ($100.9 million) and Local Road and Bridge Matching Grant Fund for the next three years ($174.1 million in total).
  • Authorize municipalities to institute a motor vehicle license excise surtax and municipal wheel tax. A March 14 fiscal note estimated this could generate up to $266.2 million annually by 2019.
  • Return local income tax back to the municipalities from which it was collected, with the requirement that 75 percent of the revenue ($378.5 million in FY 2016) be used for local transportation projects.

The plan also transfers $100 million from the state’s “Major Moves 2020” plan to the State Highway Fund, and enables Indiana to refinance existing bonds for an addition $26 million. The state legislature approved the bills March 10.

In a statement released shortly after approving the legislation Gov. Pence said, “I’m pleased to sign these bills that commit more than $1 billion in state and local infrastructure maintenance and fully funds our regional cities initiative. While our roads and bridges rank above the national average, Hoosiers know that roads mean jobs. These bills make clear our commitment to further improving the Crossroads of America and will spur economic development projects and improve the quality of life in regions across our state.”