August 27, 2024 1:00PM – Funding Indiana’s Roads for Stronger, Safer Tomorrow Task Force

Key Topics

• Local Road and Bridge Conditions: Indiana is leading the country in monitoring local road and bridge conditions. Indiana LTAP provides comprehensive asset management tools and data to local agencies to maintain road infrastructure.
• Road Funding Models: There was a discussion on road usage charges, the gas tax, and alternative revenue mechanisms such as a weight-distance fee for trucks. Other states like Oregon and Connecticut have already implemented these measures.
• Local Road Funding Needs: The estimated funding gap for local roads and bridges ranges from $987 million to $2.41 billion annually over the next 10 years. This does not account for added capacity projects like new roads or bridges.
• Electric Vehicles and Gas Tax Decline: The increasing adoption of electric vehicles and fuel efficiency is expected to reduce gas tax revenue, posing a challenge to traditional road funding models.
• Wheel Tax and Local Funding: The discussion also explored the potential for local governments to maximize their wheel tax to increase road funding but recognized that even full utilization would still leave significant funding gaps.

Committee Actions and Votes

No specific votes were detailed in the provided sections. However, various suggestions and agreements were made about how to address funding challenges, including ongoing discussions to potentially reform road usage charges and local funding mechanisms.

Additional Notes

• Community Crossings Program: While the Community Crossings program has helped improve local roads, some officials suggested that shifting these funds back into the Motor Vehicle Highway account could benefit more communities.
• Economic Return on Infrastructure Investment: Studies were mentioned that show a positive economic return on investment in roads and infrastructure, although specific figures were not available during the meeting.
• Inflation Adjustments: All funding gap analyses took inflation into account using a standard rate of 2.5%.
• Indiana’s Leadership in Asset Management: The state of Indiana is unique in its ability to monitor and report on local road and bridge conditions with a level of detail that other states do not currently achieve. Indiana LTAP is praised for its role in leading this initiative.
• Wheel Tax Discussion: One standout point was the recognition that even if all local governments maximized their wheel taxes, there would still be a significant funding shortfall, highlighting the extent of the infrastructure funding crisis in Indiana.

(Note: technical difficulties in the first 15 minutes of the livestream resulted to non-capture of transcription notes)

All right, I don’t see any more questions, so thank you for taking your time. I know you guys are busy out therAll right, I don’t see any more questions, so thank you for taking your time. I know you guys are busy out there at your conference, but appreciate you doing the presentation. So thank you. Thank you very much for having us. We appreciate the conversation. Thanks. Bill Brumbach with LSA recording stopped good afternoon, members of the first task force. My name is Bill Brembak. I work for Legislative Services Agency, Office of Fiscal and Management Analysis. I’m here to present on some revenue information as well as legislative history over the past ten to twelve years. That kind of brought us to where we are right now. First thing I wanted to go over are the main funding sources for roads. Gasoline tax, special fuel tax, motor carrier fuel use tax, the gasoline use tax. Those are the main sources of revenue for roads. You also receive revenue from international registration plan. That’s large truck registrations that are domiciled in Indiana and passed through BNB registration fees, transportation infrastructure improvement fees, supplemental registration fees on electric and hybrid vehicles, and eNDOT permits. This slide shows about how much revenue we receive from all of those sources. Now, if you look at the motor carrier fuel use tax, special fuel tax, gasoline use tax, that’s the sales tax on gasoline and gasoline excise tax. Those four sources of revenue make up 85% of revenue for roads in the state. This table shows the revenue trends over time, going back to fiscal year 2013 to now. As you’ll see, a lot of those revenue fees are kind of flat sources of revenue, notable exception being gasoline excise tax at the very top. And that large jump is from the tax increases that we put in from house enrolled act 10,002 from 2017. Next, the light blue line. That special fuel tax also increased from that same piece of legislation. Third is the gasoline use tax, the sales tax on gasoline, which is kind of dependent on the price of gasoline as sold in the state. This slide talks about the main infrastructure funds in the state, the most notable being the state highway fund, the main funding source for ENDOT, followed by the local road and bridge matching grant fund, also affectionately known as community crossings. We just heard enDoT talk about and then two conduit funds, the highway, road and street fund and the motor vehicle highway account. Those have distributions to the state highway fund, enDOT, and also local units of government through two different distribution formulas, depending on if it’s the MVH or the LRS. Then the Motor moves Construction Fund, which is a fund that kind of pulls interest investment earnings from two long term funds and injects that money into the state highway fund for construction projects. And then the two long term investment strategy funds, the next generation trust fund and the next level Indiana Trust Fund. Speaking of the local road funding formula, as I spoke to before, one side is the motor vehicle highway account, which has a distribution to cities and towns of 31.9% and then 68.1% to counties. And within that county distribution, there’s a sub allocation of 5% equally to all 92 counties, 30% based on vehicle registrations and 65% based on mileage maintained by the counties. And then on the other side is the local road and street account, where that the main determination as to what distribution form that you get is based on county size. Counties over 50,000 have a 20% distribution based on county population and 80% on county mileage. And then smaller counties, those with populations less than 50,000, receive a distribution based on 60% of county population and 40% county mileage. To kind of compare state funding sources compared to local funding sources. The state fund. State funds are about 62% of all funds collected from state funding sources, whereas local units of government will receive about 38% through either the local road and street account or the local road and bridge matching grant fund, community crossings or the local MVH. And this table kind of shows you the difference between state and local funding sources going back to fiscal year 2013 and how it’s changed over time. The large increase around 2017 is attributed to house enrolled Act 10,002 and then changes in the revenue from indexing annually thereafter. This next slide is kind of a highlight, very top level look at the legislative changes that have been done to road funding going back to 2013. Depending on the co chairs, will I can go through each one of these pieces of legislation in a little bit more detail or we can kind of just hit the highlights with starting at house enrolled Act 10,001, mister chair okay, about 1%. This particular piece of legislation enacted a 1% distribution of all sales tax that would go to the motor vehicle highway account. It was the first time that sales tax revenue went into the road funding formulae. Senate enrolled Act 479, also passed that same year, would change that, effective in fiscal year 2015, that it would be a specific gasoline use tax. The sales tax on gasoline would be known and would be distributed based on a funding formula. About 14% would go to the motor vehicle highway account. It was about a drop of about $70 million from the 1% of all sales tax to about $55 million once we did the 14% of the gasoline use tax. House enrolled Act 10,001 from 2016 injected revenue into roads, specifically a rainy day excess reserve transfer to create the community crossings matching grant fund and just gave the state highway fund some funds to do some road projects. House and Road Act 10,002 from 2017 is the one that we all talk about that had the gasoline and special fuel and motor carrier fuel use tax increases $0.10 in that first year and then indexing annually thereafter, with House enrolled Act 1290 doing away with the motor carrier surcharge tax and rolling that into special fuel. So you were collecting essentially two taxes at the pump on diesel special fuel as opposed to having a separate tax assessed to all motor carriers that passed through the state. House enrolled Act 10,001 from 2023. It extended the sunset on those indexing tax rates. So this way it kind of carried on the indexing of $0.01 for gasoline, two cent for special fuel every year max cap going forward, and then House enrolled Act 1050 from 2023 allowed indexing to be applied to the electric vehicle vehicle and the hybrid vehicle fees. I can keep going and provide a little bit more detail on each one of those or any questions so far. Okay, so kind of going back through legislation from 2013, House enrolled Act 10,001. This is the 1% sales tax distribution from all sales in the state went to the motor vehicle highway account. So this was new funds for roads in the state. And then house enrolled Act 470. I’m sorry. Senate enrolled Act 479 from 2013, changed sales tax revenue amounts distributed to roads beginning in 2015. So this would actually have the gasoline use tax collection. We didn’t know how much was actually being collected on sales tax, how much sales tax was collected on gasoline before this time. So this was a new way of us figuring out how much revenue was being collected from sales tax on gasoline and then distributing that revenue based on the funding formula. So the House enrolled Act 10,001 from 2016, transferred $100 million from the Major Moves Trust fund to the state highway fund instead of the general fund. And then 411 million of rainy day funds were distributed to the state highway fund. 226,000,185 to the newly created Community Crossings Matching grant fund. Also with that piece of legislation, there were stipulations put in on drawing down those state dollars. 50% match was required. There’s no statutory cap on those, but eNDoT has set the cap at $1 million per participant. Also in this piece of legislation was creating a sustainable source of funding for the community crossings. Which is a distribution of the gasoline use tax distributions, as well as drawing down the amount that was going from the sales tax on gasoline to the general fund. 10,001 from 2016 also allowed municipalities for the first time to impose wheel and excise Sur taxes, but the population had to be a minimum of 10,000 individuals and increased counties max rates for wheel tax and excise surtax, house and Road act from 10,002 from 2017, increased the three main sources of fuel taxes by $0.10 that year, gasoline tax, special fuel tax and motor carrier surcharge tax, and for fiscal 2019 and beyond. These rates would increase based on a formula, the consumer price index and the individual personal income, with a max cap of $0.01 for each one of those tax types. House and Road Act 10,002 also simplified the road funding formula by removing some off the top distributions of $100 million, and also established a fund that would receive a distribution of the gasoline use tax, the special transportation flexibility fund. The revenue that was deposited in this fund was always deposited in the state highway fund, with the exception of one year where it was injected to the general fund at the call of the governor. Because that was during the pandemic. House enrolled Act 10,002 also started to phase down the gasoline use tax distributions to the general fund even more with that piece of legislation phasing out the amount that was distributed to the general fund to 0% in 2025. But we enacted that a couple years ago that phased it down in 2024. Effectively, House enrolled Act 10,002 also established the transportation infrastructure improvement fee of $15 on all vehicles that weigh less than 26,000 pounds. This revenue would go to the community crossings matching grant fund also increased the international registration fees by 25% and enacted new electric and hybrid vehicle fees. Dollar 50 for hybrid vehicles and dollar 150 for electric vehicles also lowered the population parameters for wheel and exciser tax from 10,000 to 5000. It also decreased the match for smaller local units of government to draw down funds from community crossings matchings grant fund from 50% to 25%, and these smaller units were counties with populations less than 50,000 or cities and towns with populations less than 10,000. House enrolled Act 1290 from 2018 phased out the motor carrier surcharge tax and instead increased the special fuel tax by the same amount. It also changed the $0.01 annual increase to two cent to account for combining those two tax types together. Also extended the sunset of the I’m sorry House enrolled Act 10,001 from 2023 extended the sunset on indexing fuel tax rates to the end of fiscal year 2025 and accelerated the distributions of the gasoline use tax from the general fund to the state highway fund. So as of right now, the general fund receives zero funding from the gasoline use tax. House enrolled Act 1050 also increased the electric vehicle fee and hybrid fee from 150 and $50 to 221 and 74 for calendar year 2024. And also this fee will now annually increase every calendar year based on the change in the consumer price index and the individual personal income. And that’s my presentation. Any questions? Senator Holman? Thank you, Mister chairman. Thank you, Mister chairman. What’s the corpus? 250,000,200 50 million. So a total of 500 million. Luckily, Dan Hugie is here and he knows. I don’t know off the top of my head, but there is a nuance between the two. The next generation trust fund originally was started with $500 million. When we did the toll road transaction to be a legacy fund a number of years ago, it was bifurcating the next level Indiana Trust fund. That fund is actually being invested in venture capital and so forth, so I don’t have a feedback on how that’s been doing. But venture capital until it starts. Generating and doing what it’s supposed to. Generally, returns are pretty low. The next gen trust fund is invested by the treasurer of state. I do not recall off the top of my head what it was, but I think, again, it’s similar to perf funds. The next level Indiana Trust fund is invested in the VC, where you say similar to perf funds, whereas the next gen trust fund is being invested by the treasury of state. Following state investment parameters, I think when it was 500 million, it was in the range of 100 million plus every five years. So I would say now that with half, you’d be looking at 50 to maybe 70 million given upon where interest rates are. But we can verify that with the treasurer of state’s office. Yeah, Senator Holman, we can look at those exact amounts for you. Thank you. Appreciate it. Bill, that’s a really good question that the senator asked, and I know you’ve done a lot of research on it. We’ve worked together. So I just wanted to add, I appreciate all the hard work you do behind the scenes to get your arms around all this because there’s a lot of moving parts. I appreciate all your hard work, too. Thank you. Senecador. Thank you, mister Chairman. Thank you for your presentation. Two questions. Does LSA have a compilation of reports from across the state that shows what is the actual need of infrastructure for cities, towns and municipalities within the state? Specifically? Yes, within Indiana, we do not have that specifically. I believe that enDot produces those reports, and we normally have a good working relationship with InDot to kind of draw these reports down as needed. I would appreciate it if, again, with the permission of the chairs of the committee, because I think the most important question for the committee to look into is what is the need? And that should dictate next steps of understanding how we fund that need. So I don’t think we have a clear idea of what is that need across the state. The second question, do you have a report that shows how much each community across the state, county by county, currently contributes to the formula and how much they receive back from the formula? We do not have information on how much is specifically contributed to the road funding formula because of the manner in which fuel taxes are paid. They’re paid at the distributor level, and because it’s paid at the distributor level and they’re distributed to different distribution centers across the state. I have no way of knowing that specifically. And we’ve asked enDot and Dor if that information is available, and it is not available yet. And I appreciate that because that’s the confirmation when I introduced legislation on this last session, that’s what they told me. We can’t even collect data because when citizens show up at the gas station, they fill up gas. It’s not the gas station that’s really collecting the tax and submitting it to the state. It goes to the distributor or the refinery supplier level. My final question in 2017, I think when the $0.10 increase and then followed by the penny increase on an annual basis, the distribution between the state and the locals was determined to be 60%, 40%. When I say the state and the locals, meaning Inda versus locals, then something happened in 2019 that it changed. It reverted back to 3637 for the MVH and the LRS and then 6364 for the state. Do you recall the legislative history of what was the genesis behind increasing state funding and reducing local funding? The genesis for that was because I worked on both of those pieces of legislation. On the fiscal note specifically is that by repealing the motor carrier surcharge tax and moving that into special fuel that had a totally different. It changed the distribution formula so that 60 40 was changed to the 38 62 and then the 37 63% to kind of balance things out. That was the reason hole at that point in Dot in local units. This way, there would be not as much of an impact felt by either units. I appreciate it. It would be really helpful if there’s a way to get the reports that I requested. I think different localities might have it at the local level, but I think it would be really helpful for this committee and we might hear from AIM and AIC and others about the local needs if they have the compiled total for what the state needs. Thank you. You’re welcome. Any other questions? Representative Harris? Thank you, mister chair. This is in reference to slide 22. And if you said this is slipped by me, this is about the electrical fee and the hybrid fee. The third point is establish a formula for annual index. Has that formula been established and what is it? That formula is the same formula that’s used on fuel indexing. So previously there was no indexing on electric or hybrid vehicle fees. They were set at $50 and $150 back in 2017. They had not changed until 2023, where they were jumped up to 100, I’m sorry, $221.74. And then to stop from having to come back and reenact new legislation to change it. It was just put on the same schedule, like the same indexing formula that fuel taxes are put on. Is it expectation that it will constantly continue to go up if the consumer price index and the individual personal income. Both continue to go up annually. Yes, that is correct. Thank you. Anyone else? Yeah, Bill, slide number four, your trends in road funding. Just looking at this real quick and comparing it to the last presentation that it seems like there’s accelerated funding, let’s just say gas use tax from 22 to current. So it doesn’t appear that there’s been a significant loss as it relates to alternative fuels. Is there a prediction after this? Because both all these charts show that revenue has gone up significantly. I cannot speak to alternative fuels specifically, but in terms of electrification, I can say for certain that the fees that we’ve received from electric and hybrid vehicle fees, the first full fiscal year of collections was $4.1 million. The most recent fiscal year that we just closed, 13.1. And that’s before accounting for the new fees that just went into effect for calendar year 24 projections going forward just depends on where you’re pulling your data from. But that electrification, both on plug in hybrids along with electric vehicles and the increasing cafe standards, the increasing fuel efficiency of vehicle will have a detrimental, negative effect on fuel tax revenue going forward. Thank you. You’re welcome. Anyone else? All right, thank you. Next I have Carolyn Kramer Simons from the american road and transportation builders. Good morning. Let me just. Afternoon. My goodness. I’m sorry. I’ve been up since 04:00 a.m. so you’ll have to forgive me a little bit. All right. First off, thank you guys so much for inviting me here today. We really enjoy sharing our information and research and are really grateful for the opportunity to be here. I’d like to thank our chapter, the Indiana Constructors, Inc. And the built Indiana Council for being great partners and working with us and participating in our events. We’re just really grateful for that relationship and working with Indiana because you guys have so much going on. We love learning more about it. So a little bit about me. So I have been with the american road and transportation builders for about twelve years now. For eleven of those years, I have been the senior director of state funding policy. So I run the department, the transportation Investment Advocacy center that tracks all the state and local transportation funding developments around the country. So that’s policies, legislative trends, reports, successful campaigns, unsuccessful campaigns that all lives on our website. So I’m dropping that link right up there for you guys. So if you’d like more information, this is a public facing website. All that information is available online. And I’m sharing this pie chart. I think I’m the third person today that shared this pie chart. And I know I’m not the last person, but there are a few things that I wanted to note about this breakdown of funding. I got this from the in depth presentation from the last year’s first task force, and to note from this slide, it showed about 83% of your transportation funding is currently coming from motor fuel taxes. I was curious about how that compared to national trends, because we like to see those trends compared over the state trends versus the national trends. So I found the National association of State Budget Officials report from 2022 behind a paywall now, so I couldn’t update it further from there. But according to their report from 2022, 38.4% of transportation fund revenue comes from motor fuel taxes on average throughout states. So it’s a pretty big difference. Now, I will say for 2022, that was a very different year because we were coming out of the pandemic. There was a lot of excess general fund revenue that was being used by states put towards transportation funding. So I think that number might change a little bit with updated reports. But compare that to the 2018 report where they found 41.1% of average state transportation funds came from motor fuel taxes. So even if we factor in that there are some additional revenues coming in during the pandemic, we are still seeing a slight drop in that state gas tax revenue that makes up the transportation funds. And so looking at the Indiana gasoline excise tax revenue, there’s a few different fuel taxes that are coming in. But I particularly want to look at the gas tax because the good news is the gas tax is indexed. It is increasing one cent per year since that legislation was approved. We also have the gasoline use tax, that percent tax, sales tax at the pump, both of. Them have really good strengths right now. They are still generating revenue. There are a lot of challenges, though, for both of these taxes. For instance, that sales tax at the pump is going to depend on the price of fuel. So price of fuel goes up, the percent tax is going to generate more revenue. The writing on the horizon right now is that the fuel tax rates are going to. The fuel tax costs are going down. Fuels going down. So looking at a recent report that came out, 338 is the current national average of a gallon of regular gasoline at the pump. Compare that to about a year ago, and that’s about $0.47 lower. So the expectations for the rest of the year, if nothing changes, which we know never happens, there’s always surprises. But is that the gas. The gas price is going to continue to decrease. So anything indexed to the price of fuel is also going to decrease, decrease. And then looking at that gas tax, excise tax, that cent per gallon fixed rate at the pump. So that’s gone up one cent per gallon every year since the 2017 legislation. So roughly, looking back to 2018, it’s about a 17% change. Looking at the percent revenue change during that time, it’s been about a 13% change. I’m sorry, I’m gonna have to refer to my notes because I have a lot of numbers for you guys today. So the gas tax is increasing. Revenue is increasing, but not quite at the same pace. Earlier, someone asked about vehicle miles traveled in the state. I pulled this information from your county chart. VMT is also going up. So when I looked at VMT, we’re gonna look starting post pandemic, going back to about 2021, because things have changed so much since the pandemic. We’ve seen increased telework, but we’re also seeing a lot more shorter daytime trips taken throughout the day, as people that are working from home are scheduling doctor appointments during their lunch hour, stopping by the gym, things of that nature. We saw some sprawl from the urban areas during the pandemic. Some of that is starting to come back. But those people that moved out are now driving farther to get back to their offices and also decreased transit use. So people got used to taking their cars solo, not sharing a ride. And that is slowly changing, but not very quickly. So what are the challenges facing state transportation funds? Based off our conversations with other states, we’ve broken it down into four main categories. The rising adoption of electric and hybrid vehicles is, of course, top of mind when it comes to the media, and it’s a big narrative right now, is that people are increasingly using electric vehicles, and that is eroding transportation funds. You’ve heard earlier, and you’ll see in our numbers, electric vehicles are still a very small part of the fleet, and it’s not expected to change very rapidly. But those hybrid vehicles put a pin in that one. Increasing fuel efficiency, and this is really what we’re hearing from states, is the big crux for their transportation revenue. I’ll go into that. I’ll break out all of these further down the line. But the increasing fuel efficiency is indeed a challenge for many states, rising construction costs and the erosion of flat tax buying power. So we’re seeing, these are nationwide issues. They are affecting every single state. And we’re seeing a lot of states trying to grapple with the question of what does that mean for their states diversifying their revenue streams to try to protect against surprise changes like a pandemic or a recession. And also these long term changes like the increasing fuel efficiency. So we looked at battery electric vehicles in Indiana to see what the trend is. It is going up. We also have learned that the sales are not always a direct measure of electric vehicle use in the state. So we looked at the light duty ev registrations in Indiana. They are increasing. That is a big jump percent wise. That’s a big jump. It is still a very, very small percent of vehicles being registered within the states. Where we see a little bit more of a change is the hybrid vehicles. So these numbers, again, from the Indiana Office of Energy Development, that great dashboard you guys had, which was wonderful, we were able to pull the light duty electric gas hybrid vehicle registrations. That is a growing area of interest. Also, it’s those battery, those battery gas hybrids. I know we drive a Prius. We don’t charge it at the house. It just charges automatically. But those are also growing in interest. So the hybrid vehicles are indeed really attracting a lot of interest right now, especially as the electric vehicle adoption still is a primarily significant. Luxury vehicle, there’s still a lot of questions about where to charge it, how frequently to charge it, how far you can get on a charge. So while those questions are being resolved, those hybrid vehicles kind of provide that bridge and then looking at the registration fees, those are also growing. But I really wanted to spend some time talking about the fuel efficiency, because, again, this is what we’re hearing from a lot of states, is that the increasing fuel efficiency of the average ice vehicle is really the difficult thing to capture. That’s starting to erode their transportation revenue. So first, I looked at the NHTSA Cafe standards, which were just updated this summer to update to 2031. This is their baseline numbers. The numbers vary. Domestic actually has a little bit of a higher requirement for fuel efficiency versus imported, and then it breaks down by different model manufacturers. So these numbers you’ll note in my footnote, this was on page 980. So there’s a lot of other pages to go through. But this was their baseline that I found. So you can see the difference looking back to 2017, when their requirements for new model year vehicles was 32.65 miles per gallon. Look ahead to 2031, where they’re shooting for 55.42 miles per gallon. So that’s a huge difference. And that’s really where that challenge comes with people are needing less fuel. They’re going to the pump less, they’re paying their gas ties, their gas tax excise tax less, they’re paying their gasoline use tax less. Trucks are also becoming more fuel efficient. I didn’t capture that number here much more slowly, but they are still making that trend. So looking at how that impacts gas tax revenue. So if a car is coming more fuel efficient, they need less fuel, which becomes a challenge when you’re talking about use of the roads and fair use of the roads. So you’re driving an older vehicle, your neighbor has the same vehicle, you get a new vehicle, you like that vehicle, you get the same exact kind, but the new model year. But suddenly, your miles per gallon is much more improved than your neighbor. But you guys are also working the same place, and you’re driving the same roads, but you’re paying much less to maintain those roads. And that’s really where that challenge comes in. So I ran some numbers, and you’ll also have to forgive me. I used an average VMT based off my own state, Virginia, which is the average VMT is 11,400. So looking at the 2018 model year of 33.84 miles per gallon and the gas tax back then, about twenty nine cents per gallon, that generated annually about $97 per person. If that was your vehicle. If you had one of the new vehicles and you drove the average $11,400, which was my number from Virginia, then look at 2025. You drove the same year, the same number of miles, which we know is increasing, but not dramatically. So you have a fuel efficiency now of 45.8 miles per gallon. The gas tax is now thirty six cents per gallon. You’re only paying $91. So that’s slightly less. And it’s not a huge difference. The gas tax has gone up, so you’re still paying a significant, not a significant amount, but you’re still paying in the nineties. But that’s also about $6 per person annually. That adds up over time. The good news is that if you compared that to if the gas tax had stayed the same in 2018 at gallon, you would only be paying $73. So that gas tax indexing has generated significant revenue and ensured that the fuel tax maintains its power for now. But we are seeing that kind of difference, especially as fuel economy improves. And then just because we know that regulations are great, but they are not always practical. I did also compare this to the EPA real world vehicle fuel economy dashboard, which is also a great tool. I recommend it just to compare what actually was produced if they were able to meet those standards. And this again shows that increasing fuel efficiency over time. And so in the next few slides, I collaborated with our ARPA economics team, Doctor Alison Black and doctor Josh Horitz. So I have some notes for these slides. We really wanted to share them with you, and I’m happy to direct follow up questions to them. So this is just looking at some of the changes. Like I said, external factors like NHCCI changes and PPI changes are also eroding that buying power. There was a significant jump in both post pandemic. So we have 100 as the baseline during the pandemic and then the increases since then. So you can see there is a period where the PPI outpaced the NHCCI. PPI being the producer price index, that’s looking at the materials that are being cost materials, the National Highway Construction cost index being. The bids that are being put out and their estimates for those materials. So that is the percent growth. And the thing that we really note is that we have that difference between the PPI and the NHCCI. Right now, you can see the PPI is down at 135 and the NHCCI is up at 158. Our research has shown that the market really is still growing. We are seeing increased jobs out there, increased contracts that wouldn’t be happening if inflation was entirely eroding the power of the federal Iija money or the state new revenue coming in. But it has been a significant impact. Our estimates are probably somewhere in the middle of where the PPI is and the NHCCI for how much impact there is. But either way you look at it, you assume generally an average change of two to 5%, even on the low end of 35%, this is still a huge change for transportation, construction costs. And then Josh also pulled some of the state budget information. He compiles this on all of the states. So this is just looking at some of the changes over time. You can definitely see that increase from the 2017 legislation. And then starting in 2022, 2023, you see some of that federal money coming in, particularly the COVID relief funds. A big jump from that. So Josh recommends comparing the baselines, 2024 to 2021. It’s not really a decrease, it’s just more of that money from that one time government funding filtering out, and then looking at the government contract awards. So this is the value of the awards that were put in place, and this is the number of awards that have been issued. Of course, 2024 is still ongoing, so I hope that I was able to keep that brief enough for questions. That’s my favorite part. Questions. Thank you, mister chairman. So, since you’re talking with your colleagues pretty much all across the country, and this is nothing unusual for one state, we’re all having this problem, right? Pretty simple to say that a revenue model that’s solely based on gallons of anything, whether it’s a gallon of milk or a gallon of gas, is a terrible way to fund roads. Is that what we’re all coming up with? The gas tax, as you can see, is still very reliable to generate revenue. It has a very low cost of collection. It’s in place. It’s invisible. I mean, how many people that, you know, does your neighbor know how much they pay in the gas tax? It’s a very efficient way to collect that revenue that does not fully measure use these days. And that’s where the real challenge comes in. You really, for our policy perspective, tying the use of transportation infrastructure to what you pay really is the most efficient way to communicate the value. And we’re starting to lose that tie a little bit to the gas tax. Again, it’s still efficient. It’s going to be efficient for a long time. We’re seeing states increasingly looking to diversify, so trying to make sure they have revenue from a variety of different locations coming in. So if there’s a drop in fuel tax price, there’s something else in place to make sure they can still meet their needs. What would that something else be? Oh, that’s a big question, and it’s different for every state. So earlier there was a question on road usage charges, and that is an area of growing interest. A road usage charge being a very direct way to measure use you pay per mile that you drive. That has been enacted in four states. We have Virginia’s highway use fee, which is the only policy right now that is really effectively capturing that lost revenue from fuel efficiency, where you pay an annual fee based off of the fuel efficiency of your vehicle, the average miles driven within the state, and so you pay the difference. So they calculate roughly, like I said, I have a Prius. They calculate based off 11,400 miles annually traveled. They guess I paid a certain amount in gas tax and I have to pay the rest of my registration. So that’s one unique way of doing it. We also have states increasingly looking at tolling at sales taxes, both general sales taxes, vehicle sales taxes, even going into nuances of vehicle parts sales tax taxes, or electric vehicle sales taxes. States are getting very creative with looking at the variety of different transportation funding related taxes and fees and trying to bring them back to the transportation fund. So how would I capture any funding? What would be a good mechanism? I guess to incorporate as a small tool into Indiana’s future of road funding. Because we’re like 160 miles wide at any given point, right. So somebody coming across the state, they don’t stop for anything, but yet they probably are 70% to 80% of the traffic on two of our largest interstates. So they don’t contribute to any of this whatsoever. I’m not totally buying into the concept that we should charge by the weight of a vehicle based on the amount of miles that it may travel because it is registered in Indiana. How do we capture any additional revenues? Is anybody seeing that? Because Florida’s got to have the same problem, I would think, yes. So I can’t make any recommendations for Indiana because every state is different and they have different needs, different traffic patterns, things of that nature. I will say you mentioned trucks in particular. So there are several states, and I’m sorry, I don’t have my slide in front of me that do a truck wait distance fee. In Connecticut, it’s a road usage charge on trucks, but most of them call it a weight distance fee, where, especially if it’s interstate travel, the truck enters, gets their odometer checked, gets their weight checked, then when they’re exiting, they do the same thing and that’s their fee. So I know Oregon has one, Connecticut has something similar. I believe I’m going to stop there. I have the numbers. I can email them to you. Thanks. Anyone else? All right, thank you. Great. Thank you guys so much. Next is Jennifer Sharkey and doctor John Hettock. So we’d like to behalf of the LTAP program and the team at LTAP Express our gratitude for the opportunity to present here today to the committee to update our presentation from last year, but also to talk about our report, which is very hot off the presses. I made sure the ink was dry before I brought hard copies. My name is Rich Dimonquist. I’m the associate director of Indiana LTap. With me today is Jennifer Sharkey. Jennifer is our research manager at Indiana LTAP, and she led the team that prepared the road and bridge condition report, which you should have received in your information that we sent in today, along with the one page card. And she will talk about that today. I did want to express on behalf of John Haddock. He was scheduled to be here, but he had a family emergency yesterday. So I got the call from the bullpen. So I am filling in for today. But I can speak for John and for the entire team at LTAP that we are grateful for the opportunity to be in this space to talk about local roads, asset management, local bridge conditions. From my perspective, the work that’s being done here in Indiana is not, you will not find this anywhere else in the country. Indiana is reporting local road and bridge conditions at a very granular level, and that’s just not the case anywhere else. I’ve often said among our LTAP colleagues around the country that we’re raiding every road in Indiana every two years, and that’s just something unique with Indiana. We’re actually leading the country in that. And that’s a testament to the state leadership. That’s a testament to our state and local partners. All hands, many hands make light work. So we’re very grateful today to be able to, to talk about the condition of the local network and some of the need there. So we are updating our presentation. With the chair’s permission, I would love to sit and talk about Indiana LTAP. I could do that for a couple solid hours, but with the chair’s permission, I’d like to forego that we covered that at the meeting last year and turn it over to Jennifer, and she can get right to the business of the report. So move. So thank you for that. And Jennifer, it’s all yours. Well, thank you. And thank you, members of the task force, for having us here today. Again, you can see we support local agencies through six key areas, which one of those is asset management and really local agency asset management. As you heard previously from the different legislation that has been passed throughout the years, the one that really brought local agency asset management to the forefront was in 2016 with the establishment of community crossings and the requirement for an asset management plan to be eligible to apply for those fund mechanisms. And then later on in 2021, with house enrolled Act 1576, making all that information that has been collected and continues to be collected and submitted publicly available through a public facing interface by July of 2022. So, LTAP, we were asked to help assist put together those asset management plan templates so that local agencies of any scale would be able to complete those asset management plans to be eligible for community crossings, but also to use it as a tool to manage their local network. And then we are also contracted by INDOT to have the centralized database for the asset management plan information for local agencies, and then later was asked to create that public facing website which you can access through our homepage. It is called the local road and bridge dashboard. But we also have other resources that we provide and assistance to local agencies and elected officials. One of which is what rich was talking about here is the Indiana Local Road and bridge report. So we do have some hard copies if anyone is interested in having a hard copy as well. But the remainder of the presentation will focus on just kind of the surface level of the information that’s listed here. And we also have reference page numbers. So if you want to dive in deeper in the report itself, have a little ease of access to that detailed information. So Indiana local agencies are responsible for 89% of all centerline miles in the state. So this equates to 85% of all lane miles in the state of Indiana are the responsibility of local units of government. And to report on these lane miles, the asset management plans are submitted by that local unit, which outlines their objectives and measures of their asset management plan, as well as the inventory of their road and bridges. So the composition of it as well as the condition, and then also a five year treatment plan. So we collect those five year treatment plans, and that’s from a network level. So it’s not a project by project or street by street level, it’s more of a network level for that agency of number of roads paved, number of roads crack sealed, number of roads chip sealed. So that type of information. But since 2016, we’ve collected data that represents 99% of the local road inventory. So a very high percentage of our local agency network. And you can see as the years have progressed since 2016, when this was implemented, it’s only increased in the number of units of government that are submitting asset management plans, with 522 units submitting plans last year. So to look at what our local road network looks like, about 62%, or, excuse me, 65%, holistically, is made up of asphalt pavement. You can see a breakdown. City and town roads versus the county network. So the city and town roads, 90% are asphalt, with the next most utilized category of concrete roadways. And then on the county network, still asphalt is primarily used, but they also have chipped seal pavements and have 18% of their network that remains unpaved. So to do the condition rating I think most of us are familiar with the Paesr system. That is the preferred pavement evaluation method from our local agency partners, and approximately 92% of the local road network is rated using the PaeSR system. And you can see the breakdown by agency type there on the screen. But for city and towns currently what was reported in 2023, there’s 28% in good condition, 41% in fair and 31% in poor condition. And as we look historically over time since 2016, we see that the good roads are increasing, the fair roads are decreasing. However, there is a slight increase in those poor conditioned roadways. So this may indicate that some of those fair conditioned roadways might be having some deferred maintenance or perhaps missing the window of preservation. And so it’s falling into a poor category. And then as we go to our county network has a similar distribution of 28% good, 46% poor, and 46% fair, and 27% poor. And then as we look at the historical trends, the good condition roads are increasing, the fair condition roads are staying relatively the same if we look 2016 until 2023, and then the poor condition roadways are decreasing. So this may indicate that those poor roads are converting into a good state and then those preservation treatments are able to be utilized for the fair condition roads. But also keeping in mind that county road networks typically have some chip seal treatments which are good preservation treatments, whereas. The city and town network traditionally don’t have that type of pavement treatment utilized. But not only do the surface treatments vary, the functional classification also varies among the two networks. So the municipal network has a more evenly distributed approach to their condition categories across the different road use types. So I think, average around 30% poor across the five types listed there, whereas the county network, it appears there’s a priority placed on those principal arterial roads, which are the higher volume, higher speed roads within the network, and that only has 8% pour, whereas the remainder varies from the 20% to 30% pour. So, at Indiana LTAP, what we did was to look at what would it take to maintain and improve these facilities into the future. So these future road funding investments were estimated, but we did not include added capacity projects. So these are projects that add turn lanes, maybe widen the roadway width, add travel lanes, and we did. And also we did not include new infrastructure, so new road corridors or new bridge structures that might be utilized to facilitate growth and development in our local communities. So we only looked at the existing network and its existing configuration. So the inventory and condition that we saw previously. So, to estimate the future funding needs, we looked at the unit costs for each of the recommended treatment types that correlate to the condition category and the paesr rating. And these unit costs were derived from the Enda average unit bid prices. And these represent construction costs only. So we did not factor in other costs that are incurred to support construction projects like engineering design, right of way acquisition, utility relocation, construction inspection, or permitting. Those were not included in this analysis. And then I’ll just draw your attention to the paesr two and paesr one. The asterisk there. Those facilities within the poor category are actually considered failed roadways, failed not from the sense that they cannot be utilized for travel, but failed in the sense that the only viable treatment to improve those roadways is reconstruction, which is the costliest pavement treatment that we have. So, for our analysis, we looked at three different investment levels that represent three different asset management strategies in order to provide the task force a range of need for the local network. So the first strategy that we looked at aims to preserve the improvements that have been made since the previous infrastructure influx of funding. So this network strategy looks to add more years of life to the network than is lost in order to preserve what we have, and then targets reducing the percentage of poor roads to 20% or less. So, just as a comparison point, overall, as a whole, the local unit of road infrastructure is at 28% poor currently. So that would reduce it to 20%. So in order to preserve the improvements that have been made, it’s estimated that 1.23 billion per year is required over the next ten years for the local road network. And we can see this graphically here we have the green represents the good roads, yellow are the fair condition roads, and then red are the poor roads with the dark red representing the failed pazer two and paser one infrastructure. So for this strategy, you can see the city and town approach on the top varies a little bit from the county approach on the bottom, although they are both targeting the same performance measures. So this is attributed to the networks being different and the utilization of pavement treatment types being different. But for this strategy, the first seven years really focus on that preservation and rehabilitation of those fair and good roads with a little bit of work on the poor roads. And then it transitions to a preservation and reconstruction approach in year eight through year ten in order to achieve getting the local road network to a percentage of 20% or less of the poor conditioned roadways. The next strategy that was looked at was to look at how to continue the improvements that have been made on the local network. So this approach. Looks to improve but also really target those failed facilities, because I’m sure we all know that the failed facilities are typically the ones that garner the most discussion and the most conversation, since it impacts the mobility of goods, perhaps the safety of users, as well as the vitality of communities. So this approach looks at reducing the percentage of poor roads to less than 10% by year ten, and then also looks to target those failed infrastructure facilities earlier in the network strategy. So for this strategy, 2 billion is estimated annually for the next ten years. And again you can see the graphical representation of this approach with the first five years as preservation and rehabilitation. Then year six is when reconstruction can be targeted for those failed facilities, reducing the percentage to less than 10% by year ten. Now the last strategy looked at is the strategy to eliminate poor and fail roads on the local network conditions. So this closely resembles EnDOT’s strategy of not letting roads get into a failed state and minimizing the poor condition roads within their network. And for the local network, it’s estimated that 2.65 billion per year is required in order to achieve this target. So again, the graphical representation of this strategy, so this accelerates the approach so that we’re able to target failed roadway facilities in year five of the year ten strategy. So here’s a summary of the three local road network approaches, from preserving the network to improving it, to eliminating the poor and failed roads. I will make a note that on the county portion there’s an additional 35 million included because of those unpaved roads, which represent about 18% of their network, we included costs for maintaining those infrastructure facilities. So the range for local road infrastructure investment is 1.26 billion, upwards to 2.69 billion annually for the next ten years. But roads aren’t the only asset that local agencies maintain. There’s also the local bridges, which represent 70% of all bridges in the state of Indiana. So they’re responsible for over 13,000 bridge structures. And if we look at the federal highway definition of a bridge structure, this is a structure that is 20ft or greater in span length. So this does not account for small structures which are look like bridges but don’t qualify based on the definition here. So if we’re looking just at those 13,000 bridges, you can see that the average age is around 46 years, but there are over 2000 bridges on the local network that are 70 years or older and with a service life of around 70 years. For a bridge structure, this means that 16% of the network has met or surpassed its service life, which will likely need replacement in the near future. So, based on the National Bridge inventory that’s maintained by federal highway, the local bridge condition in the state of Indiana has 55% of the network in fair condition, which is an important statistic because it costs half as much to make a fair bridge into a good bridge than it does to allow that fare bridge to fall into the poor category and then try to get it into a good condition. So really looking at how those fair condition bridges have ballooned over time and making sure that we can approach that with a proper asset management strategy to prevent those facilities from falling into the poor category, but over time, the local network has done a nice job of reducing those poor condition bridges. But it could be the poor condition bridges are utilizing the majority of the bridge funding to get into a good state. So the preservation funds and rehabilitation funds have not been able to keep up with the need. So to estimate the annual funding needed for the next ten years on the local bridge network, we looked at the inventory and what bridges would need replaced, what bridges would need rehabilitated, and then also the amount of preservation funds that is needed to preserve those improvements. We did use a separate replacement criteria based on age, and this is consistent with indots asset management strategy for bridges because we don’t want to invest in a superstructure or a. Deck if it will outlast the foundation of the bridge. So this is a more efficient way to apply a bridge asset management strategy. So, based on the inventory and condition of the local network, it’s estimated that approximately 580 million per year is required for those facilities. So now we’ll look at the funding mechanisms that are currently utilized to support the local network. Local agencies use a diverse funding source to support not only their construction needs, but really their entire street and highway department responsibilities. We heard from other presenters today about the state generated dedicated funds of MVH and lrs. And then as well as the competitive grant program of community crossings, there’s also the local generated dedicated funds, which we all know as the wheel tax and exciser tax. And then also the tax levy that can be placed on properties for cumulative bridge funds to help with local bridge funding. And then lastly, there are local supplemental funds that have been utilized by local agencies to support their street and highway departments. And you can see some of those listed on the screen, but for our analysis, the dedicated funds are those that represent funds that are strictly used for local street and highway departments. We classified supplemental funds as those that can be used, but can also have other uses like you see listed there with rainy day funds, local income tax funds and et cetera. So, since 2013, comparing it to the revenue received, in 2023, local agencies received 575 million more in state generated dedicated funds. But I will note that 225 million of that increase, represented by the black part of the bar chart, is attributed to the Community Crossings matching grant program. So you can see the other chart there to your right shows the awards that have been made per calendar year from that program. From a locally generated perspective, the only tool available is the local option highway user tax or the wheel tax excise surtax. Based on the current eligibilities and maximum rates that are allowable by state law, it’s estimated that the maximum value that could be captured is around 458 million per year. And when looking at the receipts from this funding mechanism on the local level, in 2022, local agencies collected 123 million in wheel tax exciser tax funds. So that leaves an estimated capacity of around 335 million from this local funding mechanism. But to really look at the local level of effort, we derive this information from the annual operations reports that are submitted by highway and street departments to the Indiana State Board of Accounts. So you can see there’s 152 units of local government that are required to submit annual operation reports. And these units of government represent 100% of the bridge inventory and 92% of the local centerline miles. So according to the reports, 1.58 billion annually are supplemented by local agencies to support their local street and highway departments. So this does not include the wheel tax, excise Sur tax. These are those other local supplemental funds. So in addition to those construction, reconstruction and preservation activities that are supported by the 853 million. So the top chart there of the dedicated funds. Local street and highway departments also have other responsibilities such as winter maintenance, signage, drainage, roadside mowing. They also have equipment maintenance, facility upkeep, workforce development, as well as other critical safety items and accessibility items for the local transportation network. And then with the changes to the motor vehicle highway account, it is observed that those MVH unrestricted funds are commonly used for maintenance and operations activities, which is why we have grouped that with the local supplemental funding for our analysis. And our last slide here shows the need. So looking at the total local road and bridge need for the local road network at those three different performance objectives and then the local bridge need of 580 million workers. Per year, we get a total local road and bridge need estimated at 1.84 billion, upwards to 3.26 billion over the next ten years. So you can see, to identify the gap in funding, we compare this to the available dedicated funding that we just spoke on and identified, a funding gap of 987 million to upwards of 2.41 billion annually for the next ten years. So just as another reminder, this represents construction costs only for the existing infrastructure and its existing configuration. So no added capacity projects are included, no new roadway or new bridge facilities are included, and no additional support activities that are needed to get projects to the construction phase, like the engineering, design, right of way, acquisition, utility relocation, construction inspection and permitting. So just from the existing local road and bridge inventory perspective, there’s a gap of dedicated construction, reconstruction and preservation funds of 987 million, up to 2.41 billion. And with that, we’re happy to take any questions. Thank you. Ms. Salady, just one very good report. Much appreciated. And it’s always a debate about how much the state should pay for locals. And having been a little bit of a part of 10,002 and 17, we were very clear we were not going to raise the money and they spend it. They were going to have to be partners. And so my opinion hasn’t changed. Maybe others have. But more importantly to me, the figures you have given this, were those adjusted for inflation and then taken the average over ten years, or did you take into account inflation at all, and if so, use a standard two and a half or three? We did, yes. We used the standard two and a half, which I believe was consistent with some of the in depth calculations as well. Great. Thanks. Any other questions? Senator Kenora, thank you. Extremely helpful presentation. It answered questions that I’ve been looking for answers for a few weeks. Thank you for making it easier for us to get access to that. Couple of critical questions, one in an earlier slide, and I don’t recall which number you mentioned that the locals are responsible for almost 89% of the center line or center lane miles. So are these figures the 2.5 billion? Assuming we take the worst case scenario, which is to bring all of the failing and poor roads up to fair condition, does that only contemplate or the assessment or the analysis only based on the center lane or centerline miles, or is it for all roads? No, that’s a great question. And so it does account for the centerline miles that are reported, but also the land miles are reported in the asset management plans. So it’s reflective in the construction costs of those facilities. So the 2.5 billion, assuming I take that last scenario on the last slide that you showed, that shows basically that if we are to upgrade to eliminate poor and failed roads, that contemplates taking care of not only the center lines or center lane miles, but also actual lane miles. Correct? Correct. Great. The second question, does that 2.5 billion also factor federal dollars.com in special for bridges or anything like that? No, we did not include federal support in this because those are typically used for those added capacity or new infrastructure projects. So that’s data that we did not have available to be able to include in this analysis. So this is just existing infrastructure in its existing configuration. And I might be wrong, but I thought that you can apply for federal dollars for maintaining bridges, not just only for new capacity, but isn’t that the case? So in federal dollars, especially if it’s replaced, and it has to be replaced to current standards, which are typically wider bridges and longer spans because of some of the hydraulic analysis. So those would be, from our analysis, considered added capacity, if you will, because it’s not being replaced in its existing configuration. I appreciate that. And a couple more quick questions, if I go with that two point four, two point five billion dollars analysis, do you have the capacity within your data analysis to show that the need divide that by, based on county and city and town so that I can get a list of 92 counties saying here, I know you have a category for counties and a category for cities. Are you able to divide that need or that gap in funding so that we can have a better idea of. How our communities, how much their need is on a local, on local level in our communities. That is a great question. We actually anticipate that once the report is released and made public, we kind of anticipate some of that local analysis. We did not do that for this report. I believe we could, but that would be a much, much larger project. And we really wanted to focus on getting this information to this committee for this meeting, which was somewhat of a small miracle. So testament to. We appreciate your efforts, but we anticipate that question because that will be helpful with 50 senators and 100 representatives if each person receives the report and understand their local needs. I think that analysis, data analysis, will transcend the historical arguments of rural versus urban versus suburban, and helps us see the state as one and try to really address the needs across the board. One more question before. Last question. The 2.4 analysis. 2.4 billion. Does it factor if the locals max their wheel tax capacity? So this does not. It only included what is available dedicated funding from fiscal year 2023. So it was that 123 million represented, not the 335 of the, which is the capacity that is left. Because even if historically, the General assembly argued that if the locals are responsible and they raise their wheel tax to the maximum, then maybe that should be the beginning step. But based on this analysis, if you go with the 2.4, if every locality across the state of Indiana maxed their wheel tax, that will only take 335 million out of the 2.4. So there’s still a gap of $2.1 billion to be funded. Is that true? That is correct. Great. And then the final question, after the maintenance, the number of years within the first ten years, that 987 million to 2.4 billion. Once that investment is made, assuming we can find revenues to cover that, how much does. Shouldn’t that decline in the subsequent years after year ten? Because now you’re putting your infrastructure on maintenance mode rather than reconstruction. Poor reconstructing poor and failing infrastructure. Do you know what that figure looks like? So, we do not have that figure. It would depend on what the condition of the network is at the end of that year ten. So once you can get to what that condition would be, and then project out where those objectives and measures would be into the future, then there would be that discussion on the cost of preservation, maintenance and rehabilitation efforts. So theoretically, yes, it should be lower if all of those are elevated to a higher level to be able to preserve. But just like our vehicles, we can change the oil and change the tires, but at some point it will get to the end of its service life, even with all the preservation and rehabilitation efforts. And I promise this is my last question, but, you know, this is the medium where we make, we collect data. That’s the purpose of the meeting. Out of the 6.8 million residents in the state. When we look at potential national models of moving into a mileage, user based model, you know, such as, I know that Michigan had a $5 million pilot, that they’re looking into something like that. Do you know the number of citizens who drive cars or vehicles, regardless of type, regardless of electric or gasoline based? Do you know how much of a percentage of time folks spend or utilize state highways versus local roads? We do not have that information because that would be helpful. And here’s why. I think at the end of the day, if you look at 83% of our funding formula comes from our citizens across the state, basically pulling at a gas station, filling up their cars with gas. And if they are spending, if we said earlier in one of the presentations that 70% to 80% of all state highway consumption is based on folks living out of the state of Indiana, then the question that I would push for is, is it fair for the locals who have skin in the game to fund 60% or 64% of state highways and get the short change for their local roads that they consume locally and they fund local meaning. In other words, it would be helpful to look at the analysis of how much different communities contribute on a local basis to the state funding formula and how much they get back to their communities. So when a community, for example, gives a dollar to the state and receives $0.30 back on the dollar, then that will help all of us look at county by county, look at who are the donor communities to the state funding formula and why their infrastructure. Structure is in failing or poor condition and that should immediately show using data, the lack of structure or the imbalance structure of the funding formula that cripples some communities. But more questions for researchers. So I appreciate you looking to those and I hope we can get that data in the future. Thank you, Senator Holman. Anyone else? Mister Freyden, thank you. As a community, small local community leaders, commissioner, we utilize all the tools that we talk about here. Maxing out wheel tax for a small population county is not much money. I mean that’s something that, I mean we still have 850 miles of road, but our maxed out wheel tax is nothing, a dollar amount that is significant to overcome our loss. Also, Kew Bridge. Now we have an argument every discussion every year with our county council. Kewen Bridge is tied to the general fund. So the percentage rate that we negotiate with them, money, that’s dollar for dollar back to the general fund, which in my opinion is short sighted. On maintaining our bridges, we maximize Cune bridge and have that conversation every year. So some type of resolution that would maybe decouple or something like that would be very helpful at the local level as well. Thank you. Anyone else? Representative it’s an outstanding job. We’ve met multiple times. I’m sure we’re going to meet multiple times before January, so great job. I am amazed that you got all this done. So is there any small structures, culverts included in this? I know we talked about bridges, we talked about roads. How about small structure? So no, it was only bridges that are the 20ft or greater in span length. So those small structures and culverts are not included. Okay. Anyone else? All right, thank you. Thank you very much. Next I have Brian Hoff from counties. Good afternoon, members of the task force. Ryan Hoffdeen, representing the association of Indiana Counties want to maybe build a little bit on Jen’s presentation about local level of effort and where locally derived funding comes from. I’ll try not to go over the same information that she presented, but again from county funding options. Some are dedicated to construction, others are nothing. But typically you will see the local effort put into the network comes from these sources. Of course, the dedicated wheel tax, surtax and bridge funds, but also and especially local income tax is widely used riverboat revenue. Some counties in the northern part of the state still have local major moves funds, tax increment finance and also being supplemented with general fund dollars. This information comes from the information on the LTAP website that your legislation in 2021 required them to make all this information available publicly. Summary of the revenue sources and their amounts. Again, from the annual operations reports, local level of funding has been increasing since the new funding model went into effect in 2018. Of course, you can see the 50% NVH rule go into effect in 2019, but you’ll note that the local level of effort non dedicated funds in 2018 was under a billion dollars, and as I go through these, you’ll see increasing since then. This is the same chart for 2021. The per gallon revenue is dropping because people weren’t driving during the pandemic. But of course that was a good time to get roadwork completed. The local the state revenue bounced back in 21 has basically been flat since then. Not the excuse me, I should say the formula. State revenue has been flat or growing slightly since 21. The local effort continued to be above. Billion dollars for non dedicated funds. Moving on to 22 and 23, you can see the non dedicated local spend on infrastructure has increased from about $900 million in 2018 to almost $1.6 billion now that funding goes to construction, of course, also to maintenance administration, project development, personnel costs. What isn’t clear in this data is how much of that may have been ARPA dollars, which of course were a one time spend, won’t continue into the future. But that was an allowable use. So some of that money may reflect ARPA dollars that were spent on the network. But also you’ll see that inflation at this time is showing a significant impact in the finances as local units saw it was costing more to get the same amount of work done. So they were supplementing their local work with local dollars to make sure that the projects they had planned got completed and under contract. And again, there’s a link to LTAP’s website where all this data was gathered. And while I’m on, I’m just going to throw in two cent about what a fantastic job LTAP has done in collecting this data for us. I know some of our counties were a little hesitant at the beginning to start collecting this data, but over the years it’s obviously been valuable not only for policy makers, but also for counties analyzing their spend, analyzing their road conditions, and making smarter decisions based on a data driven approach. So this local level of effort is a ratio of the total receipts versus the total dedicated state distributions that highway and street departments receive. This includes both counties and cities. It is an indicator of local sources of funding compared to state sources of funding. Keep in mind, this is maintenance, preservation and new construction investment, as well as well as administration, personnel, et cetera. As an example, a local level of effort of one would indicate that only money received by the local unit from the state is reflected. A local level of effort of two means that the local government agency is matching the state dedicated funds at least dollar for dollar. Local level of effort greater than two means that the local government agency is attributing more dollars than they received from the state and dedicated sources. The average local level of effort continues to be very high since 2019. We’re above $1.50 in local investment for every state dollar put into the network, and now reaching close to $2.50 for every dollar of state money put in. So locals absolutely have skin in the game. Locals absolutely are funding their road networks in addition to the revenue that the state provides to us. Every county is putting in something, whether they have a county wheel tax or not. So just wanted to make sure that I provide you a glimpse of how counties are providing that funding. I’ll give Elkhart county as an example. You see here where their revenues are coming from. They have a major bridge, which is maxed, which is $2.5 million annual. The cumulative bridge as well. The wheel tax is $3 million of annual revenue. They have an economic development income tax. Their county wide rate is 2%, which is above the state average. But 100% of that is not the whole 2%, but 100% of their edit is dedicated to road funding, so that’s $7 million annually. They have a major moves fund. When the toll road was leased and those counties received a distribution, they put their $25 million into a revolving loan fund so they would loan themselves revenue out of it and has grown over the years to now it’s at $35 million. So they continue to use that money, loaning it to themselves, and any amount over a threshold goes back into the construction fund. They also have a horse and buggy registration fee that raises 500,000 annually, which of course is dedicated to roadway maintenance. What they received from the state, you see the dip there in 20 related to. The pandemic, but has remained largely flat, a 2% rate of increase in formula dollars coming from the state. But here is their inflation in road construction costs, the average being nearly 40% increase in their expenditure across these categories, personnel, vehicle maintenance, asphalt pavement, a couple things actually. Road salt spend was a little cheaper for a couple of years, but again, that’s not really predictable. Depends on the weather. But inflation has absolutely impacted their county finance. So while the investment that the legislature provided in 2017 absolutely helped to increase road conditions, we have now reached a point where the increased costs are causing counties to have to defer projects. Elkhart county went from an average payser rating of seven to a 6.6 last year, so their conditions have declined. The county, recognizing that they weren’t getting as much work done, had to supplement the budget with an extra $1.4 million out of their general fund this year. So that’s a very real spend that the county is having to do to make sure that their conditions remain in a quality state. That is percent increase must not have translated. So the thick blue line is at like 39% increase since 2021, but not all the counties are the same, right? So despite the fact that local units on average are highly investing in their local road and bridge networks, the burden of increasing costs of road and bridge investment is just too high for any local unit to try to undertake alone. Counties, especially those with low av and low population, are just not able to generate the revenues necessary to keep up the entire network themselves. This is from an anonymous county that has a population under 10,000 and a very low tax base. Due to the presence of a huge amount of federally owned lands within their county, they are putting in $700 to $800,000 per year in non dedicated funds, but they remain highly reliant on state funding for their infrastructure. They did get a community crossings grant this year, but while that program is great, units can’t always afford the match, and in years when it is competitive, you can’t always rely on getting that grant. So that’s just the nature of grant funds, unfortunately. So I wanted to share their story as well as a county that’s investing a lot. And of course, while I’m up here, I wouldn’t be able to go back to my members without at least mentioning the 50% NVH rule. What started as a requirement in 2017 to use half the MVH fund on construction, reconstruction and maintenance was swapped out. Maintenance for preservation. That definition is audited against annually in the annual highway operations report. Functionally, this means counties can’t use the restricted funds for personnel, equipment, project development and other costs, which are some of the highest growth categories in the previous chart. That includes engineering development costs that are required for the construction jobs that are allowed on the restricted side of the fund. Also, the administrative burden of tracking costs between paving, which is allowed in the NVH restriction, and patching, which is not allowed, requires, for example, two timesheets for employees to fill out a, depending on which job they’re on across what hour of the day. So while I understand and know the original intent of the rule, I also would ask the legislature if they so expect efficiency out of local government as well. So I ask for your interest in some level of reform of this rule that maybe reflects the original intent. Thank you. Happy to answer any questions. Thank you. Any questions over there? Propresso, Mike Ryan. Thank you, mister chairman. So, Ryan, you know, I gotta jump in on 50% NVH rule. So we’ve been having conversations, dialogue back and forth, as I have been around the northern part of the state. So I pitched at one point to you that gold card standard. What do you think of that? Yeah. The idea being that that requirement be tied to some other mechanism. And we could talk about all kinds of ideas on which mechanism makes more sense. Is it tied to a high enough local level of effort or do you maintain a high enough pacer rating? I mean, we can absolutely have conversations about any of those ideas, and I’d be happy to talk about them with our, I think the big concern is, realistically is we want to make sure highway dollars are going into highways. Right. That was the, the Tahoe rule back in the day, and I’m sure you’re going to get some more questions on that. I guess the ultimate goal would be to figure out a way that we could get back into the list. We can make me do some tweaks in there, but with a $2.5 billion need going forward, and that’s just on the local side. I didn’t point that out when LTAP was talking. That is just local dollars. Right. The endot dollars is probably another 1.5 billion. So we got a $4 billion need if we want to do good things, but no added capacity anywhere. And we all know we need safety improvement projects. So how do we make sure all those dollars are going to end up in the roads? Right. So I think partnering with the locals and giving you some additional tools would be the first step. Right. Because not all 92 counties are going to be the same need to your anonymous county, to Elkhart county. And that’s what I’m consistently hearing everywhere is, and we’re not all the same. So local tools should be part of this conversation, should it not? Sure. Thanks. Senator Saladay. Ryan, just a couple of thoughts. One is back in 2016, you weren’t with the counties then. I don’t think. But the thing that I asked the locals is what tools do you need to be able to pick up a reasonable share of the cost of local roads? Aren’t there some tools that we haven’t provided? They had asked for modification in the wheel tax. We did that. There were a couple other things that we did. Are there some other things that you see that we could empower you? Sure. So actually, I was with counties back in 2016. I’ll be at ten years at the end of this year. Time goes fast when you’re old. So one of the things back then that we suggested was a local option gas tax for the counties that are on the interstate network. Of course, people are getting off the road to fill up the tank while they buy a soda. If they stop, they’re typically stopping right off the interstate to get what they need. That would be a mechanism for those counties that would help them meet their need by capturing some of the pass through travel. And would that be a dedicated. So that because I know that secretly you love the 50% rule. So would that money be dedicated to road maintenance? I don’t care if it’s salt or whatever. Would that be dedicated or could it be, are you seeing that if that tax existed to the discretion of the county, no. Recognizing our need that all the counties have, tying those road revenues directly to road costs makes a lot of sense. That’s been the basis for our road spending for a long time. Road user fees, per gallon gas tax has all been for a long time to make sure all that money gets put into the back into the roadway network and it doesn’t move off somewhere else. So I think that is a perfectly reasonable connection. Second one is the thought that Ridges had an interesting conversation recently with a county official who boasted to me that she had sort of encouraged the killing of solar fields, two major ones, and the killing of a data center, which would have reduced the property tax of everyone in that town by 52% if the locals hadn’t spent the money. And she killed them all. But she came to me and asked for how we could get more money to her for roads, and I said, so you want me to ask 91 other counties to pay for your roads when you just took, you just turned down a major revenue source. Now, I’m not for or against any of those, but just basic economics. We have citizens against data centers, citizens against chip factories, citizens against solar panels, citizens against shredded wheat, and they’re having huge influence. On our ability to attract new businesses to our state. So I guess to put it in a question, are we adding those traditional methods of adding revenue? Is there an open door for that conversation with commissioners and council people to consider turning down revenue? Things that are revenue generators? We’re trying to bring businesses back from abroad, and everybody is for that except their backyard. So is there room for conversation that this is another way to get revenue into the counties, whether it’s ship factories or ball bearing manufacture or something else? Are we looking at that as a potential revenue source, as other revenue sources are drying up big picture wise? Yes. I mean, the four counties. Without straying too far into the renewable development conversation, the potential for increased revenue is the driver of interest for local units of government. Sometimes it’s enough, sometimes it’s not enough. I don’t know what the exact ins and outs of that situation was, but in terms of funding roads, there are only limited mechanisms that allow property tax dollars to go into dedicated roadway funds. So absolutely open to more conversations about what that might look like. But thank you. Further questions. Go ahead, please, sir. Thank you, Mister Chair Ryan. Hi there. So my question is regarding, obviously, community crossings, and I asked the question earlier, the commissioner, about different levels of funding at different levels for community crossings. Right. Smaller communities or smaller counties? Bigger counties, bigger communities kind of thing. What are you hearing from your constituency about the need? You said specifically in your, in your presentation that there are some communities that just can’t reach the thresholds, the small counties, if you will, that can’t reach those thresholds. What does that look like in practicality, for them to be eligible every year for community crossings, to be able to work on those dollars from a percentage of match or whatever the case is. Yeah. So for smaller population units, they have a lower match requirement, which for them they obviously appreciate. Since community crossings began on day one, people were coming up with ways for potentially changing it. Right. So there’s been hundreds of different ideas about ways to do that. One of the, if I can generalize, one of the prevailing thoughts that I have picked out in those conversations is that community crossings was never designed to reflect infrastructure responsibility. Large population units, small population units, large counties, small towns, all had the same cap. So if the formula was to change to have some other level of funding for larger infrastructure responsibility units, my members have said that group of large infrastructure responsibility units needs to include all the counties because they maintain all the bridges in the state over 20ft. So if that is the direction, and that’s been some of the conversation, of course, not all the conversation. There’s a, as I said, lots of ideas. But if there is an idea to move community crossings to be more reflective of the infrastructure responsibility, I would start before you get to large population, small population, you can start statutorily to look at and say counties have a infrastructure responsibility that is larger because it includes all of the bridges, local bridges in the state. So for our members, that’s where we would start. If you are going down a path of changing it based on infrastructure responsibility, just to build on that, as the guy who carried the bill, our thinking originally, just for full disclosure, was exactly what you said, Ryan, except we were trying to encourage locals to participate in asset management. And so we wanted to put a carrot out there. And in that regard, it’s been very successful. Now, we did say, okay, communities of. Size would pay less match than bigger communities. And we did have that piece, but I think it was a noble experiment. The initial reason seems to be working, but, or you wouldn’t have had the presentation before this one. But I think it’s time to now rethink how are we going to use it, because wherever there is money, everybody has an idea of how to spend it. And how do we. I’m not on the energy side where I’m chairman. We asked Purdue to tell us what the penetration of electric vehicles would be if the current administration’s desires were met. Believe it or not, in 2030, that’s only 20% penetration. So, and we’re not even running toward that right now with sales. So when we look at that, how they’re, like you say, there are a dozen or more ideas of what to do with it, but again, how we distribute that and so forth. I think the conversation is open for that in folks I’ve talked to and we’ve talked to indot, the thing I don’t like, and I, the ways and means chairman has far more influence on this. I don’t like to put numbers in statute because they’re old the next day, inflation just makes them old. So how we do that in a way that we address the other issues that are now emerging. We would have never guessed that this program would become this popular. And so how do we rightly distribute and we have some urban needs that are significant. How do we make that all work? I think is open for discussion, at least on my part as a member of the task force and the committee. It is. Again, what does it look like? Yeah. Agreed. And demonstrably, local road conditions have gotten better. The data submitted to LTAP clearly shows that. And community crossings has been a big part of that. But it’s been eight years, so I’m welcome to be part of any of those conversations you may be having. Thank you. Further questions. Senator? Thank you, mister. Just one comment on the community crossings program. I think it became popular because it’s a bucket outside of the formula. That’s the only reason is that there’s one additional source you can apply for and get a little bit extra. But at the end of the day, it’s the locals money that the citizens paid for that tax or registration, EV registrations. So to address the challenge of local communities who can’t even get to the match, if you put it back in the formula, guess what? Everyone gets money out of it, including the locals, without having to put in a match. So I think I challenged the concept that is popular on its own. It became popular just like any other grant program by the feds or the state or the locals. It just sends a message, we have extra money that we can give you. But I think if you put it back in the formula, 373-435-3637 percent of that money will go to the locals anyways and it will go through the MVH and the LRS and it’ll get the same distribution. Can you push back? I want you to tell me that this is. I’m wrong. Yeah. Any opportunity that local government has to get additional revenue to put into their infrastructure, they’re going to go after it. That much is clear. All 92 counties, almost all the cities and towns have submitted their data to LTAP to be eligible for that money. So that’s absolutely correct. And plus, we relinquished our responsibility by giving $250 million plus to INDA to make discretionary decisions for the locals. And to me, I’m concerned about that. Anytime you give an agency the ability to make these decisions of the cap and who they give and who they approve and who they don’t approve of, I’m not comfortable with that because it’s not an equal footing with how the other dollars are distributed. My final question from an economic development perspective. I’ve seen studies that show that for every dollar you invest in roads and infrastructure, there’s an economic return. Do you have any of this data? I do not, because I think the return on investment, whether for you or other teams to look into, I think it might be helpful. We have programs that we invest in annually, $500 million in ready 1.0 and 2.0. We get, you know, requests to augment budgets for IEDC for just like a couple of days ago for $101 million. If we bring businesses from abroad or from any other place, one they can’t locate in 92 counties, I don’t think we have enough businesses to bring them to add just $2.4 billion in every community. But I think the point is. Is that even those businesses and other task force that I’m serving on, we’re hearing they need housing. We don’t have workforce housing infrastructure is not well funded. So the IEDC is asking for money to build roads for the Leap project. So I think we’re spending on some of these initiatives in different places. And we need a strategic, systematic way of looking at how we are funding infrastructure in different places. Bring all of those dollars back and look at how to address that need. So this is more. I’m very passionate. I can probably, the committee probably maybe can sense this because as a former CFO for a city, it bothered the heck out of me every day when I meet with the citizen said, why is our community filled with potholes? But other communities are not bad management. It really bothered me and we didn’t have enough, and we will never have, unless the formula is structured correctly, we will never, ever, ever be able to find enough dollars to address our needs. Representative press on $30 million. Senator, maybe you and I can have a conversation offline so I don’t push back really too hard. But Ryan, to your mystery county that for the first time ever, if I understood you right, just got a community crossings. No, it wasn’t the first one. That was just how many they had. Two, three, four, probably out of ten years. What’s the lion’s share of that community crossings that just ended up in there? And you’re probably not going to have the answer, but we’ll figure this out. Versus if the whole community crossings pot was dumped into MVH. Because I keep hearing dump all of community crossings into MVH and spread it out and let it trickle down. And I gotta tell you, my little town of La Crosse and my town of Kingsford Heights are gonna seriously suffer. And Laporte county has a wheel tax. Now, I can tell you Marion county does not at 100%. Right. And when I’m looking at all these numbers, there’s $335 million a year going forward that have not been implemented. What’s that Marion county number? Because I’m hearing a lot about Marion county. So that’s why, senator, I believe we should have a serious conversation offline if we’re going to push this agenda. Absolutely. I support your idea. I’ll give you the number. It’s about $22 million if mayor and county fully duplicated or went to the max on their wheel tax. I orchestrated a meeting in the General assembly last budget cycle with the leadership of Indianapolis, and they asked a single question, if we max it, how much the General assembly is willing to help us. The answer was, go for it and we will help you. Nothing happened after that. So I personally got to the point that some of these discussions, it became more of a point, talking point, to raise the wheel tax when they published a study that shows $380 million of annual need. So if less pressure Indianapolis, let them double, you know, max the wheel tax. So that’s 20 million. So what about the annual 360 million that is needed after an initial 1.7 billion? 1.7 billion to go from failing and poor to fair. That 20 million is not even a drop in the bucket against the 1.7 billion or the annual 360 million that is now. And maybe I’ve got bad intel, but the need that I’m hearing for Marion county alone in Indianapolis is $600 million a year going forward. Am I wrong in thinking that? So it depends on how you’re looking at it and what data. You’re absolutely correct. So there were several studies, a study that showed everything, a to z, including bridges and sidewalks and whatever, got close to 2.7 billion. And that was in 2017. It was conducted by several consulting firms. I’m not sure if they LTAP was engaged in that or not, but when it came specifically to roads, specifically to roads, it was close to $1.7 billion. One time investment to bring poor condition to fair condition. And after that, before COVID it was 380 some million dollars of annual maintenance. So the 600 million could potentially be after inflation over the COVID because we had a statewide capital project that was 400 million, that jumped to $1.2 billion. So I know that. So, literally, the numbers that we just seen, depending on which scenario you picked, good, better, best, Marion county would be a third of that road funding. So are you trying to tell me that you believe a third of any kind of new road funding or the $2.1 billion belongs to Marion county? Is that what I’m hearing? No, what I’m saying is that the fair way of doing business, and that’s why I was excited about that presentation, to look at that 2.4 billion, get a report of how much each community contributes and how much they need. Let’s say Marion county needs 1.7 billion in total over the next ten years. It is not fair for Marion county to take 1.7 billion out of whatever we generate to fix their problem, if they have more need. But what I’m saying is that, to me, until we get that report that shows Marion county and other. Communities generate x dollars and here’s the gap and here’s how much they need. Then we can get really into that discussion. I’m balancing, I’ll conclude with these two priorities. I think all of us have the first priority, which is our districts. But I can’t also neglect my duty to be a colleague and look at the entire state and then, so your community is as important to my community. So I think that report will be critical to show how much is collected, how much is the need and what is the gap. And chairman, you’ve been supportive, you’ve been thoughtful. I attended panels with you where you have strategic thinking about this. So really, I don’t want to turn this into state versus Marion county, but I think it’s been a frustrating struggle for many, many years. I appreciate your thoughtfulness. Thank you. Other questions. Sir, one last comment about LTAP and the value. I felt it’s underutilized having good management or good financial records to make management decisions with. And you talk about the pays or ratings. That’s a tool. That’s a tool that helps efficiency in what we spend as well. So as communities learn how to better manage that money, it’s always a good thing. Thank you. Anything else? Thank you. Last, I think on our list we have the association of Indiana Municipalities. Now that we’re all wound up, all wound up. Floor’s yours. Go ahead, please. Well, thank you everyone. I’m Campbell Ricci with aim, representing cities and towns. Have the pleasure of going after my colleagues who have tread a lot of the same ground. But I also was going to focus my presentation on a lot of the programs that we’ve actually spent a lot of time talking about already. So that’s a good fortune. I’m going to just very briefly reference the great job that LTAP did. You heard their presentation. They’ve outlined the statewide need, and obviously we’re very supportive of finding a way to fill that gap. So I’ve just very briefly put those numbers up there, but I’m not going to go back over everything else AB has talked about because they did such a good job of it. The one thing I will say is that when we’ve had these conversations about the revenue gap, both at the state level and the local level, a lot of the conversation has not been around the gas tax. And the gas tax is the way that almost all the money is distributed to locals right now. And so if we are looking at in the future moving to any, so EnDot’s revenue study has all these different ideas for ways you could generate that money at the state level. And whatever direction we decide to go on, then I know we’re going to need to get innovative in the state. We need to look at how that affects the existing distribution formulas and how that flows down to the local level. Because if it doesn’t go just as a gas tax increase, the last time we did look to road funding, it was very easy to run that through those formulas. If you look at some of these different models, it won’t as easily just exactly flow through those formulas. And we’ll have to reevaluate that to make sure that both the state need and the local need is getting met by those funding sources. So that’s basically just the bug I want to put in the committee’s ear because I know everyone’s looking at new and innovative funding sources, but those need to be looked at and how we, our current system is very gas tax focused, especially for the locals. There’s been a lot of talk about community crossings already and I wanted to talk about community crossings. Just great fortune that this was, several of my slides already was on community crossings because we do hear a lot about that. First of all, I want to say that our members are very supportive of the program. By and large, it’s had a transformational impact on a lot of communities, especially smaller ones, has completely changed their towns. And so we’re very supportive of the program. I just have the basic structure right now. But there are also things that the communities bring to us that are ways that challenges they have and ways they think can be improved. I just wanted to bring that to the committee today. The first one is something that Senator Cordora has referenced and has also been some of the discussion here that larger communities don’t see as big of an impact from community crossings as smaller communities do. And would love to see that cap increase. And now InDOT has already increased that cap to 1.5 million. For some larger communities, that’s still not a huge impact. So we could see it go higher, but at the same time. We don’t want to take away from smaller communities, but the smaller communities have a different issue where just like Ryan mentioned, sometimes they have to save up for two, three, even four years to afford the match. And so it’s possible that in exchange for looking at a larger cap or differentiating the caps, you could lower the cap for smaller communities and lower the match. So it’s easier for them to do this on a regular basis, but free up some of that money. So those are just some things that we hear a lot about the community crossings program, Brian. Large people are very supportive and it’s been a huge impact, but we do have those two specific types of challenges that are brought up, and I think that if the task force and the legislature are going to look at community crossings, that would be a good thing to look at of how to reform it. The last thing I’m going to say, which is also connected to community crossings is about the EV and hybrid fees. As you all know, 100% of the EV and hybrid fees currently going to community crossings. Now, all of the whatever projection you look at, whether it’s just the fact that we’re indexing the fees now, plus the increased adoption, however much that’s going to be of hybrid and electric vehicles, we expect those fees to grow. And currently they’re all going to the community crossings funds. So we know that because of that, the legislature’s probably going to look at. Well, does that still make sense going forward to put 100% in the community crossings? From our perspective, we definitely want to safeguard the funding from community crossings. So we don’t want to see that go away completely, but also recognize the need for possibly part of that to be diverted out. So my thought was if you’re going to make a change to that, maybe hold harmless the amount of the EV fees that goes in the community crossings right now to make sure that that revenue source is protected and then find some sort of whatever exceeds that goes back into a more basic road funding formula that can flow back through the formulas. And if we do that early, while the number is relatively low right now, then we won’t see that much of an impact. And like the commissioner mentioned already, the community Crossings Fund is relatively well funded now relative to the applications they’re getting. So that will probably work to preserve it. I wanted to keep my comments brief on that because there was so much has already been said from LTAP and from the counties, but reserve a lot of time to answer any of your questions about anything I can be helpful with. Thank you, Representative. Yes, I just heard for the first time in eight years that the community crossings project was ill conceived, improperly designed, and a terrible program. Is it your testimony here today that aim believes that and wants community crossings gone? No. Obviously, we’re incredibly supportive of the program and it’s had a transformational impact on lots of cities and towns, and we want to see that program preserved well into the future and have its funding protected. Those are just two little tweaks that we hear sometimes are things that some communities have had issues with. But by and large, it’s been an overwhelmingly successful program, and not only from how it’s transformed, especially so many small towns, but also how it’s gotten so many cities and towns into the asset management program that otherwise wouldn’t have been. I think that’s been, maybe it’s been mentioned here before, but that’s been one of the most transformational impacts from it. Thank you. Further questions? Someone else? Sure. Thank you for your presentation. Anything else that needs to come before the committee today? Seeing none, we will stand adjourn. Thank you.  e at your conference, but appreciate you doing the presentation. So thank you. Thank you very much for having us. We appreciate the conversation. Thanks. Bill Brumbach with LSA recording stopped good afternoon, members of the first task force. My name is Bill Brembak. I work for Legislative Services Agency, Office of Fiscal and Management Analysis. I’m here to present on some revenue information as well as legislative history over the past ten to twelve years. That kind of brought us to where we are right now. First thing I wanted to go over are the main funding sources for roads. Gasoline tax, special fuel tax, motor carrier fuel use tax, the gasoline use tax. Those are the main sources of revenue for roads. You also receive revenue from international registration plan. That’s large truck registrations that are domiciled in Indiana and passed through BNB registration fees, transportation infrastructure improvement fees, supplemental registration fees on electric and hybrid vehicles, and eNDOT permits. This slide shows about how much revenue we receive from all of those sources. Now, if you look at the motor carrier fuel use tax, special fuel tax, gasoline use tax, that’s the sales tax on gasoline and gasoline excise tax. Those four sources of revenue make up 85% of revenue for roads in the state. This table shows the revenue trends over time, going back to fiscal year 2013 to now. As you’ll see, a lot of those revenue fees are kind of flat sources of revenue, notable exception being gasoline excise tax at the very top. And that large jump is from the tax increases that we put in from house enrolled act 10,002 from 2017. Next, the light blue line. That special fuel tax also increased from that same piece of legislation. Third is the gasoline use tax, the sales tax on gasoline, which is kind of dependent on the price of gasoline as sold in the state. This slide talks about the main infrastructure funds in the state, the most notable being the state highway fund, the main funding source for ENDOT, followed by the local road and bridge matching grant fund, also affectionately known as community crossings. We just heard enDoT talk about and then two conduit funds, the highway, road and street fund and the motor vehicle highway account. Those have distributions to the state highway fund, enDOT, and also local units of government through two different distribution formulas, depending on if it’s the MVH or the LRS. Then the Motor moves Construction Fund, which is a fund that kind of pulls interest investment earnings from two long term funds and injects that money into the state highway fund for construction projects. And then the two long term investment strategy funds, the next generation trust fund and the next level Indiana Trust Fund. Speaking of the local road funding formula, as I spoke to before, one side is the motor vehicle highway account, which has a distribution to cities and towns of 31.9% and then 68.1% to counties. And within that county distribution, there’s a sub allocation of 5% equally to all 92 counties, 30% based on vehicle registrations and 65% based on mileage maintained by the counties. And then on the other side is the local road and street account, where that the main determination as to what distribution form that you get is based on county size. Counties over 50,000 have a 20% distribution based on county population and 80% on county mileage. And then smaller counties, those with populations less than 50,000, receive a distribution based on 60% of county population and 40% county mileage. To kind of compare state funding sources compared to local funding sources. The state fund. State funds are about 62% of all funds collected from state funding sources, whereas local units of government will receive about 38% through either the local road and street account or the local road and bridge matching grant fund, community crossings or the local MVH. And this table kind of shows you the difference between state and local funding sources going back to fiscal year 2013 and how it’s changed over time. The large increase around 2017 is attributed to house enrolled Act 10,002 and then changes in the revenue from indexing annually thereafter. This next slide is kind of a highlight, very top level look at the legislative changes that have been done to road funding going back to 2013. Depending on the co chairs, will I can go through each one of these pieces of legislation in a little bit more detail or we can kind of just hit the highlights with starting at house enrolled Act 10,001, mister chair okay, about 1%. This particular piece of legislation enacted a 1% distribution of all sales tax that would go to the motor vehicle highway account. It was the first time that sales tax revenue went into the road funding formulae. Senate enrolled Act 479, also passed that same year, would change that, effective in fiscal year 2015, that it would be a specific gasoline use tax. The sales tax on gasoline would be known and would be distributed based on a funding formula. About 14% would go to the motor vehicle highway account. It was about a drop of about $70 million from the 1% of all sales tax to about $55 million once we did the 14% of the gasoline use tax. House enrolled Act 10,001 from 2016 injected revenue into roads, specifically a rainy day excess reserve transfer to create the community crossings matching grant fund and just gave the state highway fund some funds to do some road projects. House and Road Act 10,002 from 2017 is the one that we all talk about that had the gasoline and special fuel and motor carrier fuel use tax increases $0.10 in that first year and then indexing annually thereafter, with House enrolled Act 1290 doing away with the motor carrier surcharge tax and rolling that into special fuel. So you were collecting essentially two taxes at the pump on diesel special fuel as opposed to having a separate tax assessed to all motor carriers that passed through the state. House enrolled Act 10,001 from 2023. It extended the sunset on those indexing tax rates. So this way it kind of carried on the indexing of $0.01 for gasoline, two cent for special fuel every year max cap going forward, and then House enrolled Act 1050 from 2023 allowed indexing to be applied to the electric vehicle vehicle and the hybrid vehicle fees. I can keep going and provide a little bit more detail on each one of those or any questions so far. Okay, so kind of going back through legislation from 2013, House enrolled Act 10,001. This is the 1% sales tax distribution from all sales in the state went to the motor vehicle highway account. So this was new funds for roads in the state. And then house enrolled Act 470. I’m sorry. Senate enrolled Act 479 from 2013, changed sales tax revenue amounts distributed to roads beginning in 2015. So this would actually have the gasoline use tax collection. We didn’t know how much was actually being collected on sales tax, how much sales tax was collected on gasoline before this time. So this was a new way of us figuring out how much revenue was being collected from sales tax on gasoline and then distributing that revenue based on the funding formula. So the House enrolled Act 10,001 from 2016, transferred $100 million from the Major Moves Trust fund to the state highway fund instead of the general fund. And then 411 million of rainy day funds were distributed to the state highway fund. 226,000,185 to the newly created Community Crossings Matching grant fund. Also with that piece of legislation, there were stipulations put in on drawing down those state dollars. 50% match was required. There’s no statutory cap on those, but eNDoT has set the cap at $1 million per participant. Also in this piece of legislation was creating a sustainable source of funding for the community crossings. Which is a distribution of the gasoline use tax distributions, as well as drawing down the amount that was going from the sales tax on gasoline to the general fund. 10,001 from 2016 also allowed municipalities for the first time to impose wheel and excise Sur taxes, but the population had to be a minimum of 10,000 individuals and increased counties max rates for wheel tax and excise surtax, house and Road act from 10,002 from 2017, increased the three main sources of fuel taxes by $0.10 that year, gasoline tax, special fuel tax and motor carrier surcharge tax, and for fiscal 2019 and beyond. These rates would increase based on a formula, the consumer price index and the individual personal income, with a max cap of $0.01 for each one of those tax types. House and Road Act 10,002 also simplified the road funding formula by removing some off the top distributions of $100 million, and also established a fund that would receive a distribution of the gasoline use tax, the special transportation flexibility fund. The revenue that was deposited in this fund was always deposited in the state highway fund, with the exception of one year where it was injected to the general fund at the call of the governor. Because that was during the pandemic. House enrolled Act 10,002 also started to phase down the gasoline use tax distributions to the general fund even more with that piece of legislation phasing out the amount that was distributed to the general fund to 0% in 2025. But we enacted that a couple years ago that phased it down in 2024. Effectively, House enrolled Act 10,002 also established the transportation infrastructure improvement fee of $15 on all vehicles that weigh less than 26,000 pounds. This revenue would go to the community crossings matching grant fund also increased the international registration fees by 25% and enacted new electric and hybrid vehicle fees. Dollar 50 for hybrid vehicles and dollar 150 for electric vehicles also lowered the population parameters for wheel and exciser tax from 10,000 to 5000. It also decreased the match for smaller local units of government to draw down funds from community crossings matchings grant fund from 50% to 25%, and these smaller units were counties with populations less than 50,000 or cities and towns with populations less than 10,000. House enrolled Act 1290 from 2018 phased out the motor carrier surcharge tax and instead increased the special fuel tax by the same amount. It also changed the $0.01 annual increase to two cent to account for combining those two tax types together. Also extended the sunset of the I’m sorry House enrolled Act 10,001 from 2023 extended the sunset on indexing fuel tax rates to the end of fiscal year 2025 and accelerated the distributions of the gasoline use tax from the general fund to the state highway fund. So as of right now, the general fund receives zero funding from the gasoline use tax. House enrolled Act 1050 also increased the electric vehicle fee and hybrid fee from 150 and $50 to 221 and 74 for calendar year 2024. And also this fee will now annually increase every calendar year based on the change in the consumer price index and the individual personal income. And that’s my presentation. Any questions? Senator Holman? Thank you, Mister chairman. Thank you, Mister chairman. What’s the corpus? 250,000,200 50 million. So a total of 500 million. Luckily, Dan Hugie is here and he knows. I don’t know off the top of my head, but there is a nuance between the two. The next generation trust fund originally was started with $500 million. When we did the toll road transaction to be a legacy fund a number of years ago, it was bifurcating the next level Indiana Trust fund. That fund is actually being invested in venture capital and so forth, so I don’t have a feedback on how that’s been doing. But venture capital until it starts. Generating and doing what it’s supposed to. Generally, returns are pretty low. The next gen trust fund is invested by the treasurer of state. I do not recall off the top of my head what it was, but I think, again, it’s similar to perf funds. The next level Indiana Trust fund is invested in the VC, where you say similar to perf funds, whereas the next gen trust fund is being invested by the treasury of state. Following state investment parameters, I think when it was 500 million, it was in the range of 100 million plus every five years. So I would say now that with half, you’d be looking at 50 to maybe 70 million given upon where interest rates are. But we can verify that with the treasurer of state’s office. Yeah, Senator Holman, we can look at those exact amounts for you. Thank you. Appreciate it. Bill, that’s a really good question that the senator asked, and I know you’ve done a lot of research on it. We’ve worked together. So I just wanted to add, I appreciate all the hard work you do behind the scenes to get your arms around all this because there’s a lot of moving parts. I appreciate all your hard work, too. Thank you. Senecador. Thank you, mister Chairman. Thank you for your presentation. Two questions. Does LSA have a compilation of reports from across the state that shows what is the actual need of infrastructure for cities, towns and municipalities within the state? Specifically? Yes, within Indiana, we do not have that specifically. I believe that enDot produces those reports, and we normally have a good working relationship with InDot to kind of draw these reports down as needed. I would appreciate it if, again, with the permission of the chairs of the committee, because I think the most important question for the committee to look into is what is the need? And that should dictate next steps of understanding how we fund that need. So I don’t think we have a clear idea of what is that need across the state. The second question, do you have a report that shows how much each community across the state, county by county, currently contributes to the formula and how much they receive back from the formula? We do not have information on how much is specifically contributed to the road funding formula because of the manner in which fuel taxes are paid. They’re paid at the distributor level, and because it’s paid at the distributor level and they’re distributed to different distribution centers across the state. I have no way of knowing that specifically. And we’ve asked enDot and Dor if that information is available, and it is not available yet. And I appreciate that because that’s the confirmation when I introduced legislation on this last session, that’s what they told me. We can’t even collect data because when citizens show up at the gas station, they fill up gas. It’s not the gas station that’s really collecting the tax and submitting it to the state. It goes to the distributor or the refinery supplier level. My final question in 2017, I think when the $0.10 increase and then followed by the penny increase on an annual basis, the distribution between the state and the locals was determined to be 60%, 40%. When I say the state and the locals, meaning Inda versus locals, then something happened in 2019 that it changed. It reverted back to 3637 for the MVH and the LRS and then 6364 for the state. Do you recall the legislative history of what was the genesis behind increasing state funding and reducing local funding? The genesis for that was because I worked on both of those pieces of legislation. On the fiscal note specifically is that by repealing the motor carrier surcharge tax and moving that into special fuel that had a totally different. It changed the distribution formula so that 60 40 was changed to the 38 62 and then the 37 63% to kind of balance things out. That was the reason hole at that point in Dot in local units. This way, there would be not as much of an impact felt by either units. I appreciate it. It would be really helpful if there’s a way to get the reports that I requested. I think different localities might have it at the local level, but I think it would be really helpful for this committee and we might hear from AIM and AIC and others about the local needs if they have the compiled total for what the state needs. Thank you. You’re welcome. Any other questions? Representative Harris? Thank you, mister chair. This is in reference to slide 22. And if you said this is slipped by me, this is about the electrical fee and the hybrid fee. The third point is establish a formula for annual index. Has that formula been established and what is it? That formula is the same formula that’s used on fuel indexing. So previously there was no indexing on electric or hybrid vehicle fees. They were set at $50 and $150 back in 2017. They had not changed until 2023, where they were jumped up to 100, I’m sorry, $221.74. And then to stop from having to come back and reenact new legislation to change it. It was just put on the same schedule, like the same indexing formula that fuel taxes are put on. Is it expectation that it will constantly continue to go up if the consumer price index and the individual personal income. Both continue to go up annually. Yes, that is correct. Thank you. Anyone else? Yeah, Bill, slide number four, your trends in road funding. Just looking at this real quick and comparing it to the last presentation that it seems like there’s accelerated funding, let’s just say gas use tax from 22 to current. So it doesn’t appear that there’s been a significant loss as it relates to alternative fuels. Is there a prediction after this? Because both all these charts show that revenue has gone up significantly. I cannot speak to alternative fuels specifically, but in terms of electrification, I can say for certain that the fees that we’ve received from electric and hybrid vehicle fees, the first full fiscal year of collections was $4.1 million. The most recent fiscal year that we just closed, 13.1. And that’s before accounting for the new fees that just went into effect for calendar year 24 projections going forward just depends on where you’re pulling your data from. But that electrification, both on plug in hybrids along with electric vehicles and the increasing cafe standards, the increasing fuel efficiency of vehicle will have a detrimental, negative effect on fuel tax revenue going forward. Thank you. You’re welcome. Anyone else? All right, thank you. Next I have Carolyn Kramer Simons from the american road and transportation builders. Good morning. Let me just. Afternoon. My goodness. I’m sorry. I’ve been up since 04:00 a.m. so you’ll have to forgive me a little bit. All right. First off, thank you guys so much for inviting me here today. We really enjoy sharing our information and research and are really grateful for the opportunity to be here. I’d like to thank our chapter, the Indiana Constructors, Inc. And the built Indiana Council for being great partners and working with us and participating in our events. We’re just really grateful for that relationship and working with Indiana because you guys have so much going on. We love learning more about it. So a little bit about me. So I have been with the american road and transportation builders for about twelve years now. For eleven of those years, I have been the senior director of state funding policy. So I run the department, the transportation Investment Advocacy center that tracks all the state and local transportation funding developments around the country. So that’s policies, legislative trends, reports, successful campaigns, unsuccessful campaigns that all lives on our website. So I’m dropping that link right up there for you guys. So if you’d like more information, this is a public facing website. All that information is available online. And I’m sharing this pie chart. I think I’m the third person today that shared this pie chart. And I know I’m not the last person, but there are a few things that I wanted to note about this breakdown of funding. I got this from the in depth presentation from the last year’s first task force, and to note from this slide, it showed about 83% of your transportation funding is currently coming from motor fuel taxes. I was curious about how that compared to national trends, because we like to see those trends compared over the state trends versus the national trends. So I found the National association of State Budget Officials report from 2022 behind a paywall now, so I couldn’t update it further from there. But according to their report from 2022, 38.4% of transportation fund revenue comes from motor fuel taxes on average throughout states. So it’s a pretty big difference. Now, I will say for 2022, that was a very different year because we were coming out of the pandemic. There was a lot of excess general fund revenue that was being used by states put towards transportation funding. So I think that number might change a little bit with updated reports. But compare that to the 2018 report where they found 41.1% of average state transportation funds came from motor fuel taxes. So even if we factor in that there are some additional revenues coming in during the pandemic, we are still seeing a slight drop in that state gas tax revenue that makes up the transportation funds. And so looking at the Indiana gasoline excise tax revenue, there’s a few different fuel taxes that are coming in. But I particularly want to look at the gas tax because the good news is the gas tax is indexed. It is increasing one cent per year since that legislation was approved. We also have the gasoline use tax, that percent tax, sales tax at the pump, both of. Them have really good strengths right now. They are still generating revenue. There are a lot of challenges, though, for both of these taxes. For instance, that sales tax at the pump is going to depend on the price of fuel. So price of fuel goes up, the percent tax is going to generate more revenue. The writing on the horizon right now is that the fuel tax rates are going to. The fuel tax costs are going down. Fuels going down. So looking at a recent report that came out, 338 is the current national average of a gallon of regular gasoline at the pump. Compare that to about a year ago, and that’s about $0.47 lower. So the expectations for the rest of the year, if nothing changes, which we know never happens, there’s always surprises. But is that the gas. The gas price is going to continue to decrease. So anything indexed to the price of fuel is also going to decrease, decrease. And then looking at that gas tax, excise tax, that cent per gallon fixed rate at the pump. So that’s gone up one cent per gallon every year since the 2017 legislation. So roughly, looking back to 2018, it’s about a 17% change. Looking at the percent revenue change during that time, it’s been about a 13% change. I’m sorry, I’m gonna have to refer to my notes because I have a lot of numbers for you guys today. So the gas tax is increasing. Revenue is increasing, but not quite at the same pace. Earlier, someone asked about vehicle miles traveled in the state. I pulled this information from your county chart. VMT is also going up. So when I looked at VMT, we’re gonna look starting post pandemic, going back to about 2021, because things have changed so much since the pandemic. We’ve seen increased telework, but we’re also seeing a lot more shorter daytime trips taken throughout the day, as people that are working from home are scheduling doctor appointments during their lunch hour, stopping by the gym, things of that nature. We saw some sprawl from the urban areas during the pandemic. Some of that is starting to come back. But those people that moved out are now driving farther to get back to their offices and also decreased transit use. So people got used to taking their cars solo, not sharing a ride. And that is slowly changing, but not very quickly. So what are the challenges facing state transportation funds? Based off our conversations with other states, we’ve broken it down into four main categories. The rising adoption of electric and hybrid vehicles is, of course, top of mind when it comes to the media, and it’s a big narrative right now, is that people are increasingly using electric vehicles, and that is eroding transportation funds. You’ve heard earlier, and you’ll see in our numbers, electric vehicles are still a very small part of the fleet, and it’s not expected to change very rapidly. But those hybrid vehicles put a pin in that one. Increasing fuel efficiency, and this is really what we’re hearing from states, is the big crux for their transportation revenue. I’ll go into that. I’ll break out all of these further down the line. But the increasing fuel efficiency is indeed a challenge for many states, rising construction costs and the erosion of flat tax buying power. So we’re seeing, these are nationwide issues. They are affecting every single state. And we’re seeing a lot of states trying to grapple with the question of what does that mean for their states diversifying their revenue streams to try to protect against surprise changes like a pandemic or a recession. And also these long term changes like the increasing fuel efficiency. So we looked at battery electric vehicles in Indiana to see what the trend is. It is going up. We also have learned that the sales are not always a direct measure of electric vehicle use in the state. So we looked at the light duty ev registrations in Indiana. They are increasing. That is a big jump percent wise. That’s a big jump. It is still a very, very small percent of vehicles being registered within the states. Where we see a little bit more of a change is the hybrid vehicles. So these numbers, again, from the Indiana Office of Energy Development, that great dashboard you guys had, which was wonderful, we were able to pull the light duty electric gas hybrid vehicle registrations. That is a growing area of interest. Also, it’s those battery, those battery gas hybrids. I know we drive a Prius. We don’t charge it at the house. It just charges automatically. But those are also growing in interest. So the hybrid vehicles are indeed really attracting a lot of interest right now, especially as the electric vehicle adoption still is a primarily significant. Luxury vehicle, there’s still a lot of questions about where to charge it, how frequently to charge it, how far you can get on a charge. So while those questions are being resolved, those hybrid vehicles kind of provide that bridge and then looking at the registration fees, those are also growing. But I really wanted to spend some time talking about the fuel efficiency, because, again, this is what we’re hearing from a lot of states, is that the increasing fuel efficiency of the average ice vehicle is really the difficult thing to capture. That’s starting to erode their transportation revenue. So first, I looked at the NHTSA Cafe standards, which were just updated this summer to update to 2031. This is their baseline numbers. The numbers vary. Domestic actually has a little bit of a higher requirement for fuel efficiency versus imported, and then it breaks down by different model manufacturers. So these numbers you’ll note in my footnote, this was on page 980. So there’s a lot of other pages to go through. But this was their baseline that I found. So you can see the difference looking back to 2017, when their requirements for new model year vehicles was 32.65 miles per gallon. Look ahead to 2031, where they’re shooting for 55.42 miles per gallon. So that’s a huge difference. And that’s really where that challenge comes with people are needing less fuel. They’re going to the pump less, they’re paying their gas ties, their gas tax excise tax less, they’re paying their gasoline use tax less. Trucks are also becoming more fuel efficient. I didn’t capture that number here much more slowly, but they are still making that trend. So looking at how that impacts gas tax revenue. So if a car is coming more fuel efficient, they need less fuel, which becomes a challenge when you’re talking about use of the roads and fair use of the roads. So you’re driving an older vehicle, your neighbor has the same vehicle, you get a new vehicle, you like that vehicle, you get the same exact kind, but the new model year. But suddenly, your miles per gallon is much more improved than your neighbor. But you guys are also working the same place, and you’re driving the same roads, but you’re paying much less to maintain those roads. And that’s really where that challenge comes in. So I ran some numbers, and you’ll also have to forgive me. I used an average VMT based off my own state, Virginia, which is the average VMT is 11,400. So looking at the 2018 model year of 33.84 miles per gallon and the gas tax back then, about twenty nine cents per gallon, that generated annually about $97 per person. If that was your vehicle. If you had one of the new vehicles and you drove the average $11,400, which was my number from Virginia, then look at 2025. You drove the same year, the same number of miles, which we know is increasing, but not dramatically. So you have a fuel efficiency now of 45.8 miles per gallon. The gas tax is now thirty six cents per gallon. You’re only paying $91. So that’s slightly less. And it’s not a huge difference. The gas tax has gone up, so you’re still paying a significant, not a significant amount, but you’re still paying in the nineties. But that’s also about $6 per person annually. That adds up over time. The good news is that if you compared that to if the gas tax had stayed the same in 2018 at gallon, you would only be paying $73. So that gas tax indexing has generated significant revenue and ensured that the fuel tax maintains its power for now. But we are seeing that kind of difference, especially as fuel economy improves. And then just because we know that regulations are great, but they are not always practical. I did also compare this to the EPA real world vehicle fuel economy dashboard, which is also a great tool. I recommend it just to compare what actually was produced if they were able to meet those standards. And this again shows that increasing fuel efficiency over time. And so in the next few slides, I collaborated with our ARPA economics team, Doctor Alison Black and doctor Josh Horitz. So I have some notes for these slides. We really wanted to share them with you, and I’m happy to direct follow up questions to them. So this is just looking at some of the changes. Like I said, external factors like NHCCI changes and PPI changes are also eroding that buying power. There was a significant jump in both post pandemic. So we have 100 as the baseline during the pandemic and then the increases since then. So you can see there is a period where the PPI outpaced the NHCCI. PPI being the producer price index, that’s looking at the materials that are being cost materials, the National Highway Construction cost index being. The bids that are being put out and their estimates for those materials. So that is the percent growth. And the thing that we really note is that we have that difference between the PPI and the NHCCI. Right now, you can see the PPI is down at 135 and the NHCCI is up at 158. Our research has shown that the market really is still growing. We are seeing increased jobs out there, increased contracts that wouldn’t be happening if inflation was entirely eroding the power of the federal Iija money or the state new revenue coming in. But it has been a significant impact. Our estimates are probably somewhere in the middle of where the PPI is and the NHCCI for how much impact there is. But either way you look at it, you assume generally an average change of two to 5%, even on the low end of 35%, this is still a huge change for transportation, construction costs. And then Josh also pulled some of the state budget information. He compiles this on all of the states. So this is just looking at some of the changes over time. You can definitely see that increase from the 2017 legislation. And then starting in 2022, 2023, you see some of that federal money coming in, particularly the COVID relief funds. A big jump from that. So Josh recommends comparing the baselines, 2024 to 2021. It’s not really a decrease, it’s just more of that money from that one time government funding filtering out, and then looking at the government contract awards. So this is the value of the awards that were put in place, and this is the number of awards that have been issued. Of course, 2024 is still ongoing, so I hope that I was able to keep that brief enough for questions. That’s my favorite part. Questions. Thank you, mister chairman. So, since you’re talking with your colleagues pretty much all across the country, and this is nothing unusual for one state, we’re all having this problem, right? Pretty simple to say that a revenue model that’s solely based on gallons of anything, whether it’s a gallon of milk or a gallon of gas, is a terrible way to fund roads. Is that what we’re all coming up with? The gas tax, as you can see, is still very reliable to generate revenue. It has a very low cost of collection. It’s in place. It’s invisible. I mean, how many people that, you know, does your neighbor know how much they pay in the gas tax? It’s a very efficient way to collect that revenue that does not fully measure use these days. And that’s where the real challenge comes in. You really, for our policy perspective, tying the use of transportation infrastructure to what you pay really is the most efficient way to communicate the value. And we’re starting to lose that tie a little bit to the gas tax. Again, it’s still efficient. It’s going to be efficient for a long time. We’re seeing states increasingly looking to diversify, so trying to make sure they have revenue from a variety of different locations coming in. So if there’s a drop in fuel tax price, there’s something else in place to make sure they can still meet their needs. What would that something else be? Oh, that’s a big question, and it’s different for every state. So earlier there was a question on road usage charges, and that is an area of growing interest. A road usage charge being a very direct way to measure use you pay per mile that you drive. That has been enacted in four states. We have Virginia’s highway use fee, which is the only policy right now that is really effectively capturing that lost revenue from fuel efficiency, where you pay an annual fee based off of the fuel efficiency of your vehicle, the average miles driven within the state, and so you pay the difference. So they calculate roughly, like I said, I have a Prius. They calculate based off 11,400 miles annually traveled. They guess I paid a certain amount in gas tax and I have to pay the rest of my registration. So that’s one unique way of doing it. We also have states increasingly looking at tolling at sales taxes, both general sales taxes, vehicle sales taxes, even going into nuances of vehicle parts sales tax taxes, or electric vehicle sales taxes. States are getting very creative with looking at the variety of different transportation funding related taxes and fees and trying to bring them back to the transportation fund. So how would I capture any funding? What would be a good mechanism? I guess to incorporate as a small tool into Indiana’s future of road funding. Because we’re like 160 miles wide at any given point, right. So somebody coming across the state, they don’t stop for anything, but yet they probably are 70% to 80% of the traffic on two of our largest interstates. So they don’t contribute to any of this whatsoever. I’m not totally buying into the concept that we should charge by the weight of a vehicle based on the amount of miles that it may travel because it is registered in Indiana. How do we capture any additional revenues? Is anybody seeing that? Because Florida’s got to have the same problem, I would think, yes. So I can’t make any recommendations for Indiana because every state is different and they have different needs, different traffic patterns, things of that nature. I will say you mentioned trucks in particular. So there are several states, and I’m sorry, I don’t have my slide in front of me that do a truck wait distance fee. In Connecticut, it’s a road usage charge on trucks, but most of them call it a weight distance fee, where, especially if it’s interstate travel, the truck enters, gets their odometer checked, gets their weight checked, then when they’re exiting, they do the same thing and that’s their fee. So I know Oregon has one, Connecticut has something similar. I believe I’m going to stop there. I have the numbers. I can email them to you. Thanks. Anyone else? All right, thank you. Great. Thank you guys so much. Next is Jennifer Sharkey and doctor John Hettock. So we’d like to behalf of the LTAP program and the team at LTAP Express our gratitude for the opportunity to present here today to the committee to update our presentation from last year, but also to talk about our report, which is very hot off the presses. I made sure the ink was dry before I brought hard copies. My name is Rich Dimonquist. I’m the associate director of Indiana LTap. With me today is Jennifer Sharkey. Jennifer is our research manager at Indiana LTAP, and she led the team that prepared the road and bridge condition report, which you should have received in your information that we sent in today, along with the one page card. And she will talk about that today. I did want to express on behalf of John Haddock. He was scheduled to be here, but he had a family emergency yesterday. So I got the call from the bullpen. So I am filling in for today. But I can speak for John and for the entire team at LTAP that we are grateful for the opportunity to be in this space to talk about local roads, asset management, local bridge conditions. From my perspective, the work that’s being done here in Indiana is not, you will not find this anywhere else in the country. Indiana is reporting local road and bridge conditions at a very granular level, and that’s just not the case anywhere else. I’ve often said among our LTAP colleagues around the country that we’re raiding every road in Indiana every two years, and that’s just something unique with Indiana. We’re actually leading the country in that. And that’s a testament to the state leadership. That’s a testament to our state and local partners. All hands, many hands make light work. So we’re very grateful today to be able to, to talk about the condition of the local network and some of the need there. So we are updating our presentation. With the chair’s permission, I would love to sit and talk about Indiana LTAP. I could do that for a couple solid hours, but with the chair’s permission, I’d like to forego that we covered that at the meeting last year and turn it over to Jennifer, and she can get right to the business of the report. So move. So thank you for that. And Jennifer, it’s all yours. Well, thank you. And thank you, members of the task force, for having us here today. Again, you can see we support local agencies through six key areas, which one of those is asset management and really local agency asset management. As you heard previously from the different legislation that has been passed throughout the years, the one that really brought local agency asset management to the forefront was in 2016 with the establishment of community crossings and the requirement for an asset management plan to be eligible to apply for those fund mechanisms. And then later on in 2021, with house enrolled Act 1576, making all that information that has been collected and continues to be collected and submitted publicly available through a public facing interface by July of 2022. So, LTAP, we were asked to help assist put together those asset management plan templates so that local agencies of any scale would be able to complete those asset management plans to be eligible for community crossings, but also to use it as a tool to manage their local network. And then we are also contracted by INDOT to have the centralized database for the asset management plan information for local agencies, and then later was asked to create that public facing website which you can access through our homepage. It is called the local road and bridge dashboard. But we also have other resources that we provide and assistance to local agencies and elected officials. One of which is what rich was talking about here is the Indiana Local Road and bridge report. So we do have some hard copies if anyone is interested in having a hard copy as well. But the remainder of the presentation will focus on just kind of the surface level of the information that’s listed here. And we also have reference page numbers. So if you want to dive in deeper in the report itself, have a little ease of access to that detailed information. So Indiana local agencies are responsible for 89% of all centerline miles in the state. So this equates to 85% of all lane miles in the state of Indiana are the responsibility of local units of government. And to report on these lane miles, the asset management plans are submitted by that local unit, which outlines their objectives and measures of their asset management plan, as well as the inventory of their road and bridges. So the composition of it as well as the condition, and then also a five year treatment plan. So we collect those five year treatment plans, and that’s from a network level. So it’s not a project by project or street by street level, it’s more of a network level for that agency of number of roads paved, number of roads crack sealed, number of roads chip sealed. So that type of information. But since 2016, we’ve collected data that represents 99% of the local road inventory. So a very high percentage of our local agency network. And you can see as the years have progressed since 2016, when this was implemented, it’s only increased in the number of units of government that are submitting asset management plans, with 522 units submitting plans last year. So to look at what our local road network looks like, about 62%, or, excuse me, 65%, holistically, is made up of asphalt pavement. You can see a breakdown. City and town roads versus the county network. So the city and town roads, 90% are asphalt, with the next most utilized category of concrete roadways. And then on the county network, still asphalt is primarily used, but they also have chipped seal pavements and have 18% of their network that remains unpaved. So to do the condition rating I think most of us are familiar with the Paesr system. That is the preferred pavement evaluation method from our local agency partners, and approximately 92% of the local road network is rated using the PaeSR system. And you can see the breakdown by agency type there on the screen. But for city and towns currently what was reported in 2023, there’s 28% in good condition, 41% in fair and 31% in poor condition. And as we look historically over time since 2016, we see that the good roads are increasing, the fair roads are decreasing. However, there is a slight increase in those poor conditioned roadways. So this may indicate that some of those fair conditioned roadways might be having some deferred maintenance or perhaps missing the window of preservation. And so it’s falling into a poor category. And then as we go to our county network has a similar distribution of 28% good, 46% poor, and 46% fair, and 27% poor. And then as we look at the historical trends, the good condition roads are increasing, the fair condition roads are staying relatively the same if we look 2016 until 2023, and then the poor condition roadways are decreasing. So this may indicate that those poor roads are converting into a good state and then those preservation treatments are able to be utilized for the fair condition roads. But also keeping in mind that county road networks typically have some chip seal treatments which are good preservation treatments, whereas. The city and town network traditionally don’t have that type of pavement treatment utilized. But not only do the surface treatments vary, the functional classification also varies among the two networks. So the municipal network has a more evenly distributed approach to their condition categories across the different road use types. So I think, average around 30% poor across the five types listed there, whereas the county network, it appears there’s a priority placed on those principal arterial roads, which are the higher volume, higher speed roads within the network, and that only has 8% pour, whereas the remainder varies from the 20% to 30% pour. So, at Indiana LTAP, what we did was to look at what would it take to maintain and improve these facilities into the future. So these future road funding investments were estimated, but we did not include added capacity projects. So these are projects that add turn lanes, maybe widen the roadway width, add travel lanes, and we did. And also we did not include new infrastructure, so new road corridors or new bridge structures that might be utilized to facilitate growth and development in our local communities. So we only looked at the existing network and its existing configuration. So the inventory and condition that we saw previously. So, to estimate the future funding needs, we looked at the unit costs for each of the recommended treatment types that correlate to the condition category and the paesr rating. And these unit costs were derived from the Enda average unit bid prices. And these represent construction costs only. So we did not factor in other costs that are incurred to support construction projects like engineering design, right of way acquisition, utility relocation, construction inspection, or permitting. Those were not included in this analysis. And then I’ll just draw your attention to the paesr two and paesr one. The asterisk there. Those facilities within the poor category are actually considered failed roadways, failed not from the sense that they cannot be utilized for travel, but failed in the sense that the only viable treatment to improve those roadways is reconstruction, which is the costliest pavement treatment that we have. So, for our analysis, we looked at three different investment levels that represent three different asset management strategies in order to provide the task force a range of need for the local network. So the first strategy that we looked at aims to preserve the improvements that have been made since the previous infrastructure influx of funding. So this network strategy looks to add more years of life to the network than is lost in order to preserve what we have, and then targets reducing the percentage of poor roads to 20% or less. So, just as a comparison point, overall, as a whole, the local unit of road infrastructure is at 28% poor currently. So that would reduce it to 20%. So in order to preserve the improvements that have been made, it’s estimated that 1.23 billion per year is required over the next ten years for the local road network. And we can see this graphically here we have the green represents the good roads, yellow are the fair condition roads, and then red are the poor roads with the dark red representing the failed pazer two and paser one infrastructure. So for this strategy, you can see the city and town approach on the top varies a little bit from the county approach on the bottom, although they are both targeting the same performance measures. So this is attributed to the networks being different and the utilization of pavement treatment types being different. But for this strategy, the first seven years really focus on that preservation and rehabilitation of those fair and good roads with a little bit of work on the poor roads. And then it transitions to a preservation and reconstruction approach in year eight through year ten in order to achieve getting the local road network to a percentage of 20% or less of the poor conditioned roadways. The next strategy that was looked at was to look at how to continue the improvements that have been made on the local network. So this approach. Looks to improve but also really target those failed facilities, because I’m sure we all know that the failed facilities are typically the ones that garner the most discussion and the most conversation, since it impacts the mobility of goods, perhaps the safety of users, as well as the vitality of communities. So this approach looks at reducing the percentage of poor roads to less than 10% by year ten, and then also looks to target those failed infrastructure facilities earlier in the network strategy. So for this strategy, 2 billion is estimated annually for the next ten years. And again you can see the graphical representation of this approach with the first five years as preservation and rehabilitation. Then year six is when reconstruction can be targeted for those failed facilities, reducing the percentage to less than 10% by year ten. Now the last strategy looked at is the strategy to eliminate poor and fail roads on the local network conditions. So this closely resembles EnDOT’s strategy of not letting roads get into a failed state and minimizing the poor condition roads within their network. And for the local network, it’s estimated that 2.65 billion per year is required in order to achieve this target. So again, the graphical representation of this strategy, so this accelerates the approach so that we’re able to target failed roadway facilities in year five of the year ten strategy. So here’s a summary of the three local road network approaches, from preserving the network to improving it, to eliminating the poor and failed roads. I will make a note that on the county portion there’s an additional 35 million included because of those unpaved roads, which represent about 18% of their network, we included costs for maintaining those infrastructure facilities. So the range for local road infrastructure investment is 1.26 billion, upwards to 2.69 billion annually for the next ten years. But roads aren’t the only asset that local agencies maintain. There’s also the local bridges, which represent 70% of all bridges in the state of Indiana. So they’re responsible for over 13,000 bridge structures. And if we look at the federal highway definition of a bridge structure, this is a structure that is 20ft or greater in span length. So this does not account for small structures which are look like bridges but don’t qualify based on the definition here. So if we’re looking just at those 13,000 bridges, you can see that the average age is around 46 years, but there are over 2000 bridges on the local network that are 70 years or older and with a service life of around 70 years. For a bridge structure, this means that 16% of the network has met or surpassed its service life, which will likely need replacement in the near future. So, based on the National Bridge inventory that’s maintained by federal highway, the local bridge condition in the state of Indiana has 55% of the network in fair condition, which is an important statistic because it costs half as much to make a fair bridge into a good bridge than it does to allow that fare bridge to fall into the poor category and then try to get it into a good condition. So really looking at how those fair condition bridges have ballooned over time and making sure that we can approach that with a proper asset management strategy to prevent those facilities from falling into the poor category, but over time, the local network has done a nice job of reducing those poor condition bridges. But it could be the poor condition bridges are utilizing the majority of the bridge funding to get into a good state. So the preservation funds and rehabilitation funds have not been able to keep up with the need. So to estimate the annual funding needed for the next ten years on the local bridge network, we looked at the inventory and what bridges would need replaced, what bridges would need rehabilitated, and then also the amount of preservation funds that is needed to preserve those improvements. We did use a separate replacement criteria based on age, and this is consistent with indots asset management strategy for bridges because we don’t want to invest in a superstructure or a. Deck if it will outlast the foundation of the bridge. So this is a more efficient way to apply a bridge asset management strategy. So, based on the inventory and condition of the local network, it’s estimated that approximately 580 million per year is required for those facilities. So now we’ll look at the funding mechanisms that are currently utilized to support the local network. Local agencies use a diverse funding source to support not only their construction needs, but really their entire street and highway department responsibilities. We heard from other presenters today about the state generated dedicated funds of MVH and lrs. And then as well as the competitive grant program of community crossings, there’s also the local generated dedicated funds, which we all know as the wheel tax and exciser tax. And then also the tax levy that can be placed on properties for cumulative bridge funds to help with local bridge funding. And then lastly, there are local supplemental funds that have been utilized by local agencies to support their street and highway departments. And you can see some of those listed on the screen, but for our analysis, the dedicated funds are those that represent funds that are strictly used for local street and highway departments. We classified supplemental funds as those that can be used, but can also have other uses like you see listed there with rainy day funds, local income tax funds and et cetera. So, since 2013, comparing it to the revenue received, in 2023, local agencies received 575 million more in state generated dedicated funds. But I will note that 225 million of that increase, represented by the black part of the bar chart, is attributed to the Community Crossings matching grant program. So you can see the other chart there to your right shows the awards that have been made per calendar year from that program. From a locally generated perspective, the only tool available is the local option highway user tax or the wheel tax excise surtax. Based on the current eligibilities and maximum rates that are allowable by state law, it’s estimated that the maximum value that could be captured is around 458 million per year. And when looking at the receipts from this funding mechanism on the local level, in 2022, local agencies collected 123 million in wheel tax exciser tax funds. So that leaves an estimated capacity of around 335 million from this local funding mechanism. But to really look at the local level of effort, we derive this information from the annual operations reports that are submitted by highway and street departments to the Indiana State Board of Accounts. So you can see there’s 152 units of local government that are required to submit annual operation reports. And these units of government represent 100% of the bridge inventory and 92% of the local centerline miles. So according to the reports, 1.58 billion annually are supplemented by local agencies to support their local street and highway departments. So this does not include the wheel tax, excise Sur tax. These are those other local supplemental funds. So in addition to those construction, reconstruction and preservation activities that are supported by the 853 million. So the top chart there of the dedicated funds. Local street and highway departments also have other responsibilities such as winter maintenance, signage, drainage, roadside mowing. They also have equipment maintenance, facility upkeep, workforce development, as well as other critical safety items and accessibility items for the local transportation network. And then with the changes to the motor vehicle highway account, it is observed that those MVH unrestricted funds are commonly used for maintenance and operations activities, which is why we have grouped that with the local supplemental funding for our analysis. And our last slide here shows the need. So looking at the total local road and bridge need for the local road network at those three different performance objectives and then the local bridge need of 580 million workers. Per year, we get a total local road and bridge need estimated at 1.84 billion, upwards to 3.26 billion over the next ten years. So you can see, to identify the gap in funding, we compare this to the available dedicated funding that we just spoke on and identified, a funding gap of 987 million to upwards of 2.41 billion annually for the next ten years. So just as another reminder, this represents construction costs only for the existing infrastructure and its existing configuration. So no added capacity projects are included, no new roadway or new bridge facilities are included, and no additional support activities that are needed to get projects to the construction phase, like the engineering, design, right of way, acquisition, utility relocation, construction inspection and permitting. So just from the existing local road and bridge inventory perspective, there’s a gap of dedicated construction, reconstruction and preservation funds of 987 million, up to 2.41 billion. And with that, we’re happy to take any questions. Thank you. Ms. Salady, just one very good report. Much appreciated. And it’s always a debate about how much the state should pay for locals. And having been a little bit of a part of 10,002 and 17, we were very clear we were not going to raise the money and they spend it. They were going to have to be partners. And so my opinion hasn’t changed. Maybe others have. But more importantly to me, the figures you have given this, were those adjusted for inflation and then taken the average over ten years, or did you take into account inflation at all, and if so, use a standard two and a half or three? We did, yes. We used the standard two and a half, which I believe was consistent with some of the in depth calculations as well. Great. Thanks. Any other questions? Senator Kenora, thank you. Extremely helpful presentation. It answered questions that I’ve been looking for answers for a few weeks. Thank you for making it easier for us to get access to that. Couple of critical questions, one in an earlier slide, and I don’t recall which number you mentioned that the locals are responsible for almost 89% of the center line or center lane miles. So are these figures the 2.5 billion? Assuming we take the worst case scenario, which is to bring all of the failing and poor roads up to fair condition, does that only contemplate or the assessment or the analysis only based on the center lane or centerline miles, or is it for all roads? No, that’s a great question. And so it does account for the centerline miles that are reported, but also the land miles are reported in the asset management plans. So it’s reflective in the construction costs of those facilities. So the 2.5 billion, assuming I take that last scenario on the last slide that you showed, that shows basically that if we are to upgrade to eliminate poor and failed roads, that contemplates taking care of not only the center lines or center lane miles, but also actual lane miles. Correct? Correct. Great. The second question, does that 2.5 billion also factor federal dollars.com in special for bridges or anything like that? No, we did not include federal support in this because those are typically used for those added capacity or new infrastructure projects. So that’s data that we did not have available to be able to include in this analysis. So this is just existing infrastructure in its existing configuration. And I might be wrong, but I thought that you can apply for federal dollars for maintaining bridges, not just only for new capacity, but isn’t that the case? So in federal dollars, especially if it’s replaced, and it has to be replaced to current standards, which are typically wider bridges and longer spans because of some of the hydraulic analysis. So those would be, from our analysis, considered added capacity, if you will, because it’s not being replaced in its existing configuration. I appreciate that. And a couple more quick questions, if I go with that two point four, two point five billion dollars analysis, do you have the capacity within your data analysis to show that the need divide that by, based on county and city and town so that I can get a list of 92 counties saying here, I know you have a category for counties and a category for cities. Are you able to divide that need or that gap in funding so that we can have a better idea of. How our communities, how much their need is on a local, on local level in our communities. That is a great question. We actually anticipate that once the report is released and made public, we kind of anticipate some of that local analysis. We did not do that for this report. I believe we could, but that would be a much, much larger project. And we really wanted to focus on getting this information to this committee for this meeting, which was somewhat of a small miracle. So testament to. We appreciate your efforts, but we anticipate that question because that will be helpful with 50 senators and 100 representatives if each person receives the report and understand their local needs. I think that analysis, data analysis, will transcend the historical arguments of rural versus urban versus suburban, and helps us see the state as one and try to really address the needs across the board. One more question before. Last question. The 2.4 analysis. 2.4 billion. Does it factor if the locals max their wheel tax capacity? So this does not. It only included what is available dedicated funding from fiscal year 2023. So it was that 123 million represented, not the 335 of the, which is the capacity that is left. Because even if historically, the General assembly argued that if the locals are responsible and they raise their wheel tax to the maximum, then maybe that should be the beginning step. But based on this analysis, if you go with the 2.4, if every locality across the state of Indiana maxed their wheel tax, that will only take 335 million out of the 2.4. So there’s still a gap of $2.1 billion to be funded. Is that true? That is correct. Great. And then the final question, after the maintenance, the number of years within the first ten years, that 987 million to 2.4 billion. Once that investment is made, assuming we can find revenues to cover that, how much does. Shouldn’t that decline in the subsequent years after year ten? Because now you’re putting your infrastructure on maintenance mode rather than reconstruction. Poor reconstructing poor and failing infrastructure. Do you know what that figure looks like? So, we do not have that figure. It would depend on what the condition of the network is at the end of that year ten. So once you can get to what that condition would be, and then project out where those objectives and measures would be into the future, then there would be that discussion on the cost of preservation, maintenance and rehabilitation efforts. So theoretically, yes, it should be lower if all of those are elevated to a higher level to be able to preserve. But just like our vehicles, we can change the oil and change the tires, but at some point it will get to the end of its service life, even with all the preservation and rehabilitation efforts. And I promise this is my last question, but, you know, this is the medium where we make, we collect data. That’s the purpose of the meeting. Out of the 6.8 million residents in the state. When we look at potential national models of moving into a mileage, user based model, you know, such as, I know that Michigan had a $5 million pilot, that they’re looking into something like that. Do you know the number of citizens who drive cars or vehicles, regardless of type, regardless of electric or gasoline based? Do you know how much of a percentage of time folks spend or utilize state highways versus local roads? We do not have that information because that would be helpful. And here’s why. I think at the end of the day, if you look at 83% of our funding formula comes from our citizens across the state, basically pulling at a gas station, filling up their cars with gas. And if they are spending, if we said earlier in one of the presentations that 70% to 80% of all state highway consumption is based on folks living out of the state of Indiana, then the question that I would push for is, is it fair for the locals who have skin in the game to fund 60% or 64% of state highways and get the short change for their local roads that they consume locally and they fund local meaning. In other words, it would be helpful to look at the analysis of how much different communities contribute on a local basis to the state funding formula and how much they get back to their communities. So when a community, for example, gives a dollar to the state and receives $0.30 back on the dollar, then that will help all of us look at county by county, look at who are the donor communities to the state funding formula and why their infrastructure. Structure is in failing or poor condition and that should immediately show using data, the lack of structure or the imbalance structure of the funding formula that cripples some communities. But more questions for researchers. So I appreciate you looking to those and I hope we can get that data in the future. Thank you, Senator Holman. Anyone else? Mister Freyden, thank you. As a community, small local community leaders, commissioner, we utilize all the tools that we talk about here. Maxing out wheel tax for a small population county is not much money. I mean that’s something that, I mean we still have 850 miles of road, but our maxed out wheel tax is nothing, a dollar amount that is significant to overcome our loss. Also, Kew Bridge. Now we have an argument every discussion every year with our county council. Kewen Bridge is tied to the general fund. So the percentage rate that we negotiate with them, money, that’s dollar for dollar back to the general fund, which in my opinion is short sighted. On maintaining our bridges, we maximize Cune bridge and have that conversation every year. So some type of resolution that would maybe decouple or something like that would be very helpful at the local level as well. Thank you. Anyone else? Representative it’s an outstanding job. We’ve met multiple times. I’m sure we’re going to meet multiple times before January, so great job. I am amazed that you got all this done. So is there any small structures, culverts included in this? I know we talked about bridges, we talked about roads. How about small structure? So no, it was only bridges that are the 20ft or greater in span length. So those small structures and culverts are not included. Okay. Anyone else? All right, thank you. Thank you very much. Next I have Brian Hoff from counties. Good afternoon, members of the task force. Ryan Hoffdeen, representing the association of Indiana Counties want to maybe build a little bit on Jen’s presentation about local level of effort and where locally derived funding comes from. I’ll try not to go over the same information that she presented, but again from county funding options. Some are dedicated to construction, others are nothing. But typically you will see the local effort put into the network comes from these sources. Of course, the dedicated wheel tax, surtax and bridge funds, but also and especially local income tax is widely used riverboat revenue. Some counties in the northern part of the state still have local major moves funds, tax increment finance and also being supplemented with general fund dollars. This information comes from the information on the LTAP website that your legislation in 2021 required them to make all this information available publicly. Summary of the revenue sources and their amounts. Again, from the annual operations reports, local level of funding has been increasing since the new funding model went into effect in 2018. Of course, you can see the 50% NVH rule go into effect in 2019, but you’ll note that the local level of effort non dedicated funds in 2018 was under a billion dollars, and as I go through these, you’ll see increasing since then. This is the same chart for 2021. The per gallon revenue is dropping because people weren’t driving during the pandemic. But of course that was a good time to get roadwork completed. The local the state revenue bounced back in 21 has basically been flat since then. Not the excuse me, I should say the formula. State revenue has been flat or growing slightly since 21. The local effort continued to be above. Billion dollars for non dedicated funds. Moving on to 22 and 23, you can see the non dedicated local spend on infrastructure has increased from about $900 million in 2018 to almost $1.6 billion now that funding goes to construction, of course, also to maintenance administration, project development, personnel costs. What isn’t clear in this data is how much of that may have been ARPA dollars, which of course were a one time spend, won’t continue into the future. But that was an allowable use. So some of that money may reflect ARPA dollars that were spent on the network. But also you’ll see that inflation at this time is showing a significant impact in the finances as local units saw it was costing more to get the same amount of work done. So they were supplementing their local work with local dollars to make sure that the projects they had planned got completed and under contract. And again, there’s a link to LTAP’s website where all this data was gathered. And while I’m on, I’m just going to throw in two cent about what a fantastic job LTAP has done in collecting this data for us. I know some of our counties were a little hesitant at the beginning to start collecting this data, but over the years it’s obviously been valuable not only for policy makers, but also for counties analyzing their spend, analyzing their road conditions, and making smarter decisions based on a data driven approach. So this local level of effort is a ratio of the total receipts versus the total dedicated state distributions that highway and street departments receive. This includes both counties and cities. It is an indicator of local sources of funding compared to state sources of funding. Keep in mind, this is maintenance, preservation and new construction investment, as well as well as administration, personnel, et cetera. As an example, a local level of effort of one would indicate that only money received by the local unit from the state is reflected. A local level of effort of two means that the local government agency is matching the state dedicated funds at least dollar for dollar. Local level of effort greater than two means that the local government agency is attributing more dollars than they received from the state and dedicated sources. The average local level of effort continues to be very high since 2019. We’re above $1.50 in local investment for every state dollar put into the network, and now reaching close to $2.50 for every dollar of state money put in. So locals absolutely have skin in the game. Locals absolutely are funding their road networks in addition to the revenue that the state provides to us. Every county is putting in something, whether they have a county wheel tax or not. So just wanted to make sure that I provide you a glimpse of how counties are providing that funding. I’ll give Elkhart county as an example. You see here where their revenues are coming from. They have a major bridge, which is maxed, which is $2.5 million annual. The cumulative bridge as well. The wheel tax is $3 million of annual revenue. They have an economic development income tax. Their county wide rate is 2%, which is above the state average. But 100% of that is not the whole 2%, but 100% of their edit is dedicated to road funding, so that’s $7 million annually. They have a major moves fund. When the toll road was leased and those counties received a distribution, they put their $25 million into a revolving loan fund so they would loan themselves revenue out of it and has grown over the years to now it’s at $35 million. So they continue to use that money, loaning it to themselves, and any amount over a threshold goes back into the construction fund. They also have a horse and buggy registration fee that raises 500,000 annually, which of course is dedicated to roadway maintenance. What they received from the state, you see the dip there in 20 related to. The pandemic, but has remained largely flat, a 2% rate of increase in formula dollars coming from the state. But here is their inflation in road construction costs, the average being nearly 40% increase in their expenditure across these categories, personnel, vehicle maintenance, asphalt pavement, a couple things actually. Road salt spend was a little cheaper for a couple of years, but again, that’s not really predictable. Depends on the weather. But inflation has absolutely impacted their county finance. So while the investment that the legislature provided in 2017 absolutely helped to increase road conditions, we have now reached a point where the increased costs are causing counties to have to defer projects. Elkhart county went from an average payser rating of seven to a 6.6 last year, so their conditions have declined. The county, recognizing that they weren’t getting as much work done, had to supplement the budget with an extra $1.4 million out of their general fund this year. So that’s a very real spend that the county is having to do to make sure that their conditions remain in a quality state. That is percent increase must not have translated. So the thick blue line is at like 39% increase since 2021, but not all the counties are the same, right? So despite the fact that local units on average are highly investing in their local road and bridge networks, the burden of increasing costs of road and bridge investment is just too high for any local unit to try to undertake alone. Counties, especially those with low av and low population, are just not able to generate the revenues necessary to keep up the entire network themselves. This is from an anonymous county that has a population under 10,000 and a very low tax base. Due to the presence of a huge amount of federally owned lands within their county, they are putting in $700 to $800,000 per year in non dedicated funds, but they remain highly reliant on state funding for their infrastructure. They did get a community crossings grant this year, but while that program is great, units can’t always afford the match, and in years when it is competitive, you can’t always rely on getting that grant. So that’s just the nature of grant funds, unfortunately. So I wanted to share their story as well as a county that’s investing a lot. And of course, while I’m up here, I wouldn’t be able to go back to my members without at least mentioning the 50% NVH rule. What started as a requirement in 2017 to use half the MVH fund on construction, reconstruction and maintenance was swapped out. Maintenance for preservation. That definition is audited against annually in the annual highway operations report. Functionally, this means counties can’t use the restricted funds for personnel, equipment, project development and other costs, which are some of the highest growth categories in the previous chart. That includes engineering development costs that are required for the construction jobs that are allowed on the restricted side of the fund. Also, the administrative burden of tracking costs between paving, which is allowed in the NVH restriction, and patching, which is not allowed, requires, for example, two timesheets for employees to fill out a, depending on which job they’re on across what hour of the day. So while I understand and know the original intent of the rule, I also would ask the legislature if they so expect efficiency out of local government as well. So I ask for your interest in some level of reform of this rule that maybe reflects the original intent. Thank you. Happy to answer any questions. Thank you. Any questions over there? Propresso, Mike Ryan. Thank you, mister chairman. So, Ryan, you know, I gotta jump in on 50% NVH rule. So we’ve been having conversations, dialogue back and forth, as I have been around the northern part of the state. So I pitched at one point to you that gold card standard. What do you think of that? Yeah. The idea being that that requirement be tied to some other mechanism. And we could talk about all kinds of ideas on which mechanism makes more sense. Is it tied to a high enough local level of effort or do you maintain a high enough pacer rating? I mean, we can absolutely have conversations about any of those ideas, and I’d be happy to talk about them with our, I think the big concern is, realistically is we want to make sure highway dollars are going into highways. Right. That was the, the Tahoe rule back in the day, and I’m sure you’re going to get some more questions on that. I guess the ultimate goal would be to figure out a way that we could get back into the list. We can make me do some tweaks in there, but with a $2.5 billion need going forward, and that’s just on the local side. I didn’t point that out when LTAP was talking. That is just local dollars. Right. The endot dollars is probably another 1.5 billion. So we got a $4 billion need if we want to do good things, but no added capacity anywhere. And we all know we need safety improvement projects. So how do we make sure all those dollars are going to end up in the roads? Right. So I think partnering with the locals and giving you some additional tools would be the first step. Right. Because not all 92 counties are going to be the same need to your anonymous county, to Elkhart county. And that’s what I’m consistently hearing everywhere is, and we’re not all the same. So local tools should be part of this conversation, should it not? Sure. Thanks. Senator Saladay. Ryan, just a couple of thoughts. One is back in 2016, you weren’t with the counties then. I don’t think. But the thing that I asked the locals is what tools do you need to be able to pick up a reasonable share of the cost of local roads? Aren’t there some tools that we haven’t provided? They had asked for modification in the wheel tax. We did that. There were a couple other things that we did. Are there some other things that you see that we could empower you? Sure. So actually, I was with counties back in 2016. I’ll be at ten years at the end of this year. Time goes fast when you’re old. So one of the things back then that we suggested was a local option gas tax for the counties that are on the interstate network. Of course, people are getting off the road to fill up the tank while they buy a soda. If they stop, they’re typically stopping right off the interstate to get what they need. That would be a mechanism for those counties that would help them meet their need by capturing some of the pass through travel. And would that be a dedicated. So that because I know that secretly you love the 50% rule. So would that money be dedicated to road maintenance? I don’t care if it’s salt or whatever. Would that be dedicated or could it be, are you seeing that if that tax existed to the discretion of the county, no. Recognizing our need that all the counties have, tying those road revenues directly to road costs makes a lot of sense. That’s been the basis for our road spending for a long time. Road user fees, per gallon gas tax has all been for a long time to make sure all that money gets put into the back into the roadway network and it doesn’t move off somewhere else. So I think that is a perfectly reasonable connection. Second one is the thought that Ridges had an interesting conversation recently with a county official who boasted to me that she had sort of encouraged the killing of solar fields, two major ones, and the killing of a data center, which would have reduced the property tax of everyone in that town by 52% if the locals hadn’t spent the money. And she killed them all. But she came to me and asked for how we could get more money to her for roads, and I said, so you want me to ask 91 other counties to pay for your roads when you just took, you just turned down a major revenue source. Now, I’m not for or against any of those, but just basic economics. We have citizens against data centers, citizens against chip factories, citizens against solar panels, citizens against shredded wheat, and they’re having huge influence. On our ability to attract new businesses to our state. So I guess to put it in a question, are we adding those traditional methods of adding revenue? Is there an open door for that conversation with commissioners and council people to consider turning down revenue? Things that are revenue generators? We’re trying to bring businesses back from abroad, and everybody is for that except their backyard. So is there room for conversation that this is another way to get revenue into the counties, whether it’s ship factories or ball bearing manufacture or something else? Are we looking at that as a potential revenue source, as other revenue sources are drying up big picture wise? Yes. I mean, the four counties. Without straying too far into the renewable development conversation, the potential for increased revenue is the driver of interest for local units of government. Sometimes it’s enough, sometimes it’s not enough. I don’t know what the exact ins and outs of that situation was, but in terms of funding roads, there are only limited mechanisms that allow property tax dollars to go into dedicated roadway funds. So absolutely open to more conversations about what that might look like. But thank you. Further questions. Go ahead, please, sir. Thank you, Mister Chair Ryan. Hi there. So my question is regarding, obviously, community crossings, and I asked the question earlier, the commissioner, about different levels of funding at different levels for community crossings. Right. Smaller communities or smaller counties? Bigger counties, bigger communities kind of thing. What are you hearing from your constituency about the need? You said specifically in your, in your presentation that there are some communities that just can’t reach the thresholds, the small counties, if you will, that can’t reach those thresholds. What does that look like in practicality, for them to be eligible every year for community crossings, to be able to work on those dollars from a percentage of match or whatever the case is. Yeah. So for smaller population units, they have a lower match requirement, which for them they obviously appreciate. Since community crossings began on day one, people were coming up with ways for potentially changing it. Right. So there’s been hundreds of different ideas about ways to do that. One of the, if I can generalize, one of the prevailing thoughts that I have picked out in those conversations is that community crossings was never designed to reflect infrastructure responsibility. Large population units, small population units, large counties, small towns, all had the same cap. So if the formula was to change to have some other level of funding for larger infrastructure responsibility units, my members have said that group of large infrastructure responsibility units needs to include all the counties because they maintain all the bridges in the state over 20ft. So if that is the direction, and that’s been some of the conversation, of course, not all the conversation. There’s a, as I said, lots of ideas. But if there is an idea to move community crossings to be more reflective of the infrastructure responsibility, I would start before you get to large population, small population, you can start statutorily to look at and say counties have a infrastructure responsibility that is larger because it includes all of the bridges, local bridges in the state. So for our members, that’s where we would start. If you are going down a path of changing it based on infrastructure responsibility, just to build on that, as the guy who carried the bill, our thinking originally, just for full disclosure, was exactly what you said, Ryan, except we were trying to encourage locals to participate in asset management. And so we wanted to put a carrot out there. And in that regard, it’s been very successful. Now, we did say, okay, communities of. Size would pay less match than bigger communities. And we did have that piece, but I think it was a noble experiment. The initial reason seems to be working, but, or you wouldn’t have had the presentation before this one. But I think it’s time to now rethink how are we going to use it, because wherever there is money, everybody has an idea of how to spend it. And how do we. I’m not on the energy side where I’m chairman. We asked Purdue to tell us what the penetration of electric vehicles would be if the current administration’s desires were met. Believe it or not, in 2030, that’s only 20% penetration. So, and we’re not even running toward that right now with sales. So when we look at that, how they’re, like you say, there are a dozen or more ideas of what to do with it, but again, how we distribute that and so forth. I think the conversation is open for that in folks I’ve talked to and we’ve talked to indot, the thing I don’t like, and I, the ways and means chairman has far more influence on this. I don’t like to put numbers in statute because they’re old the next day, inflation just makes them old. So how we do that in a way that we address the other issues that are now emerging. We would have never guessed that this program would become this popular. And so how do we rightly distribute and we have some urban needs that are significant. How do we make that all work? I think is open for discussion, at least on my part as a member of the task force and the committee. It is. Again, what does it look like? Yeah. Agreed. And demonstrably, local road conditions have gotten better. The data submitted to LTAP clearly shows that. And community crossings has been a big part of that. But it’s been eight years, so I’m welcome to be part of any of those conversations you may be having. Thank you. Further questions. Senator? Thank you, mister. Just one comment on the community crossings program. I think it became popular because it’s a bucket outside of the formula. That’s the only reason is that there’s one additional source you can apply for and get a little bit extra. But at the end of the day, it’s the locals money that the citizens paid for that tax or registration, EV registrations. So to address the challenge of local communities who can’t even get to the match, if you put it back in the formula, guess what? Everyone gets money out of it, including the locals, without having to put in a match. So I think I challenged the concept that is popular on its own. It became popular just like any other grant program by the feds or the state or the locals. It just sends a message, we have extra money that we can give you. But I think if you put it back in the formula, 373-435-3637 percent of that money will go to the locals anyways and it will go through the MVH and the LRS and it’ll get the same distribution. Can you push back? I want you to tell me that this is. I’m wrong. Yeah. Any opportunity that local government has to get additional revenue to put into their infrastructure, they’re going to go after it. That much is clear. All 92 counties, almost all the cities and towns have submitted their data to LTAP to be eligible for that money. So that’s absolutely correct. And plus, we relinquished our responsibility by giving $250 million plus to INDA to make discretionary decisions for the locals. And to me, I’m concerned about that. Anytime you give an agency the ability to make these decisions of the cap and who they give and who they approve and who they don’t approve of, I’m not comfortable with that because it’s not an equal footing with how the other dollars are distributed. My final question from an economic development perspective. I’ve seen studies that show that for every dollar you invest in roads and infrastructure, there’s an economic return. Do you have any of this data? I do not, because I think the return on investment, whether for you or other teams to look into, I think it might be helpful. We have programs that we invest in annually, $500 million in ready 1.0 and 2.0. We get, you know, requests to augment budgets for IEDC for just like a couple of days ago for $101 million. If we bring businesses from abroad or from any other place, one they can’t locate in 92 counties, I don’t think we have enough businesses to bring them to add just $2.4 billion in every community. But I think the point is. Is that even those businesses and other task force that I’m serving on, we’re hearing they need housing. We don’t have workforce housing infrastructure is not well funded. So the IEDC is asking for money to build roads for the Leap project. So I think we’re spending on some of these initiatives in different places. And we need a strategic, systematic way of looking at how we are funding infrastructure in different places. Bring all of those dollars back and look at how to address that need. So this is more. I’m very passionate. I can probably, the committee probably maybe can sense this because as a former CFO for a city, it bothered the heck out of me every day when I meet with the citizen said, why is our community filled with potholes? But other communities are not bad management. It really bothered me and we didn’t have enough, and we will never have, unless the formula is structured correctly, we will never, ever, ever be able to find enough dollars to address our needs. Representative press on $30 million. Senator, maybe you and I can have a conversation offline so I don’t push back really too hard. But Ryan, to your mystery county that for the first time ever, if I understood you right, just got a community crossings. No, it wasn’t the first one. That was just how many they had. Two, three, four, probably out of ten years. What’s the lion’s share of that community crossings that just ended up in there? And you’re probably not going to have the answer, but we’ll figure this out. Versus if the whole community crossings pot was dumped into MVH. Because I keep hearing dump all of community crossings into MVH and spread it out and let it trickle down. And I gotta tell you, my little town of La Crosse and my town of Kingsford Heights are gonna seriously suffer. And Laporte county has a wheel tax. Now, I can tell you Marion county does not at 100%. Right. And when I’m looking at all these numbers, there’s $335 million a year going forward that have not been implemented. What’s that Marion county number? Because I’m hearing a lot about Marion county. So that’s why, senator, I believe we should have a serious conversation offline if we’re going to push this agenda. Absolutely. I support your idea. I’ll give you the number. It’s about $22 million if mayor and county fully duplicated or went to the max on their wheel tax. I orchestrated a meeting in the General assembly last budget cycle with the leadership of Indianapolis, and they asked a single question, if we max it, how much the General assembly is willing to help us. The answer was, go for it and we will help you. Nothing happened after that. So I personally got to the point that some of these discussions, it became more of a point, talking point, to raise the wheel tax when they published a study that shows $380 million of annual need. So if less pressure Indianapolis, let them double, you know, max the wheel tax. So that’s 20 million. So what about the annual 360 million that is needed after an initial 1.7 billion? 1.7 billion to go from failing and poor to fair. That 20 million is not even a drop in the bucket against the 1.7 billion or the annual 360 million that is now. And maybe I’ve got bad intel, but the need that I’m hearing for Marion county alone in Indianapolis is $600 million a year going forward. Am I wrong in thinking that? So it depends on how you’re looking at it and what data. You’re absolutely correct. So there were several studies, a study that showed everything, a to z, including bridges and sidewalks and whatever, got close to 2.7 billion. And that was in 2017. It was conducted by several consulting firms. I’m not sure if they LTAP was engaged in that or not, but when it came specifically to roads, specifically to roads, it was close to $1.7 billion. One time investment to bring poor condition to fair condition. And after that, before COVID it was 380 some million dollars of annual maintenance. So the 600 million could potentially be after inflation over the COVID because we had a statewide capital project that was 400 million, that jumped to $1.2 billion. So I know that. So, literally, the numbers that we just seen, depending on which scenario you picked, good, better, best, Marion county would be a third of that road funding. So are you trying to tell me that you believe a third of any kind of new road funding or the $2.1 billion belongs to Marion county? Is that what I’m hearing? No, what I’m saying is that the fair way of doing business, and that’s why I was excited about that presentation, to look at that 2.4 billion, get a report of how much each community contributes and how much they need. Let’s say Marion county needs 1.7 billion in total over the next ten years. It is not fair for Marion county to take 1.7 billion out of whatever we generate to fix their problem, if they have more need. But what I’m saying is that, to me, until we get that report that shows Marion county and other. Communities generate x dollars and here’s the gap and here’s how much they need. Then we can get really into that discussion. I’m balancing, I’ll conclude with these two priorities. I think all of us have the first priority, which is our districts. But I can’t also neglect my duty to be a colleague and look at the entire state and then, so your community is as important to my community. So I think that report will be critical to show how much is collected, how much is the need and what is the gap. And chairman, you’ve been supportive, you’ve been thoughtful. I attended panels with you where you have strategic thinking about this. So really, I don’t want to turn this into state versus Marion county, but I think it’s been a frustrating struggle for many, many years. I appreciate your thoughtfulness. Thank you. Other questions. Sir, one last comment about LTAP and the value. I felt it’s underutilized having good management or good financial records to make management decisions with. And you talk about the pays or ratings. That’s a tool. That’s a tool that helps efficiency in what we spend as well. So as communities learn how to better manage that money, it’s always a good thing. Thank you. Anything else? Thank you. Last, I think on our list we have the association of Indiana Municipalities. Now that we’re all wound up, all wound up. Floor’s yours. Go ahead, please. Well, thank you everyone. I’m Campbell Ricci with aim, representing cities and towns. Have the pleasure of going after my colleagues who have tread a lot of the same ground. But I also was going to focus my presentation on a lot of the programs that we’ve actually spent a lot of time talking about already. So that’s a good fortune. I’m going to just very briefly reference the great job that LTAP did. You heard their presentation. They’ve outlined the statewide need, and obviously we’re very supportive of finding a way to fill that gap. So I’ve just very briefly put those numbers up there, but I’m not going to go back over everything else AB has talked about because they did such a good job of it. The one thing I will say is that when we’ve had these conversations about the revenue gap, both at the state level and the local level, a lot of the conversation has not been around the gas tax. And the gas tax is the way that almost all the money is distributed to locals right now. And so if we are looking at in the future moving to any, so EnDot’s revenue study has all these different ideas for ways you could generate that money at the state level. And whatever direction we decide to go on, then I know we’re going to need to get innovative in the state. We need to look at how that affects the existing distribution formulas and how that flows down to the local level. Because if it doesn’t go just as a gas tax increase, the last time we did look to road funding, it was very easy to run that through those formulas. If you look at some of these different models, it won’t as easily just exactly flow through those formulas. And we’ll have to reevaluate that to make sure that both the state need and the local need is getting met by those funding sources. So that’s basically just the bug I want to put in the committee’s ear because I know everyone’s looking at new and innovative funding sources, but those need to be looked at and how we, our current system is very gas tax focused, especially for the locals. There’s been a lot of talk about community crossings already and I wanted to talk about community crossings. Just great fortune that this was, several of my slides already was on community crossings because we do hear a lot about that. First of all, I want to say that our members are very supportive of the program. By and large, it’s had a transformational impact on a lot of communities, especially smaller ones, has completely changed their towns. And so we’re very supportive of the program. I just have the basic structure right now. But there are also things that the communities bring to us that are ways that challenges they have and ways they think can be improved. I just wanted to bring that to the committee today. The first one is something that Senator Cordora has referenced and has also been some of the discussion here that larger communities don’t see as big of an impact from community crossings as smaller communities do. And would love to see that cap increase. And now InDOT has already increased that cap to 1.5 million. For some larger communities, that’s still not a huge impact. So we could see it go higher, but at the same time. We don’t want to take away from smaller communities, but the smaller communities have a different issue where just like Ryan mentioned, sometimes they have to save up for two, three, even four years to afford the match. And so it’s possible that in exchange for looking at a larger cap or differentiating the caps, you could lower the cap for smaller communities and lower the match. So it’s easier for them to do this on a regular basis, but free up some of that money. So those are just some things that we hear a lot about the community crossings program, Brian. Large people are very supportive and it’s been a huge impact, but we do have those two specific types of challenges that are brought up, and I think that if the task force and the legislature are going to look at community crossings, that would be a good thing to look at of how to reform it. The last thing I’m going to say, which is also connected to community crossings is about the EV and hybrid fees. As you all know, 100% of the EV and hybrid fees currently going to community crossings. Now, all of the whatever projection you look at, whether it’s just the fact that we’re indexing the fees now, plus the increased adoption, however much that’s going to be of hybrid and electric vehicles, we expect those fees to grow. And currently they’re all going to the community crossings funds. So we know that because of that, the legislature’s probably going to look at. Well, does that still make sense going forward to put 100% in the community crossings? From our perspective, we definitely want to safeguard the funding from community crossings. So we don’t want to see that go away completely, but also recognize the need for possibly part of that to be diverted out. So my thought was if you’re going to make a change to that, maybe hold harmless the amount of the EV fees that goes in the community crossings right now to make sure that that revenue source is protected and then find some sort of whatever exceeds that goes back into a more basic road funding formula that can flow back through the formulas. And if we do that early, while the number is relatively low right now, then we won’t see that much of an impact. And like the commissioner mentioned already, the community Crossings Fund is relatively well funded now relative to the applications they’re getting. So that will probably work to preserve it. I wanted to keep my comments brief on that because there was so much has already been said from LTAP and from the counties, but reserve a lot of time to answer any of your questions about anything I can be helpful with. Thank you, Representative. Yes, I just heard for the first time in eight years that the community crossings project was ill conceived, improperly designed, and a terrible program. Is it your testimony here today that aim believes that and wants community crossings gone? No. Obviously, we’re incredibly supportive of the program and it’s had a transformational impact on lots of cities and towns, and we want to see that program preserved well into the future and have its funding protected. Those are just two little tweaks that we hear sometimes are things that some communities have had issues with. But by and large, it’s been an overwhelmingly successful program, and not only from how it’s transformed, especially so many small towns, but also how it’s gotten so many cities and towns into the asset management program that otherwise wouldn’t have been. I think that’s been, maybe it’s been mentioned here before, but that’s been one of the most transformational impacts from it. Thank you. Further questions? Someone else? Sure. Thank you for your presentation. Anything else that needs to come before the committee today? Seeing none, we will stand adjourn. Thank you.  

• Rep. Jeffrey Thompson – District 28, House Co-chair
• Sen. Ryan Mishler – District 9, Senate Co-chair
• Sen. Michael Crider – Senate Majority Member
• Sen. Travis Holdman – Senate Majority Member
• Sen. Fady Qaddoura – District 30, Senate Minority Member
• Rep. Jim Pressel – District 20, House Majority Member
• Rep. Edmond Soliday – District 4, House Majority Member
• Rep. Earl Harris – District 2, House Minority Member
• Rich Dimonquist – Associate Director, Indiana LTAP
• Jennifer Sharkey – Research Manager, Indiana LTAP
• Senator Kenora – Task Force Member
• Carolyn Kramer Simons – Senior Director of State Funding Policy, American Road and Transportation Builders
• Representative Mike Ryan – Task Force Member