IN governor approves tax increase to fund $5B infrastructure initiative

Dive Brief:

Indiana Gov. Eric Holcomb announced a $5 billion, seven-year state infrastructure initiative on Thursday, a program funded by tax increases, according to NWI Times.
Officials expect the initiative to result in an additional $63 per person in fuel taxes annually, but officials said feedback from citizens indicate they don't mind the increase as long as the money is earmarked for roads. New taxes and fees include a 10-cent per gallon tax increase — which will increase 1 cent a year for seven years — and a $15 vehicle registration fee.
Indiana officials will also pursue tolling certain highways to capture revenue from out-of-state drivers.

Dive Insight:

This announcement is just the latest in a string of massive state highway spending plans.

Last week, the Illinois Tollway announced that it would pursue a $4 billion plan to widen a portion of its roadway that sees significant traffic congestion. The Tollway board approved the plan last Thursday. The project will involve adding a fifth lane in each direction of a 22-mile stretch that passes near Chicago's O'Hare International Airport, as well as adding "flex lanes" for buses and emergency vehicles. Instead of raising tolls to pay for it, the Tollway said it would maximize toll collection and lower debt service on bonds.

In March, Texas lawmakers proposed an $8.9 billion improvement plan for 230 state highway projects. Even though the Texas Transportation Commission has approved the program, it still must survive the state budget process. If approved, that initiative would see the Houston area get the lion's share of the money — $3.5 billion for work along Interstate 45.

The size of those programs pales in comparison to California's $52 billion plan to repair roads and other infrastructure assets. The state reported a backlog of $130 billion in necessary infrastructure repairs, and the American Society of Civil Engineers said that approximately 50% of California roads are in poor condition. To pay for all that work, state lawmakers approved a variety of user fees and taxes, including a 12 cent-per gallon tax increase. The state is also imposing a new vehicle licensing fee of between $25 and $50. Unlike in Indiana, Republicans in California came out against the plan, arguing against more tax increases.