On Local Government Road Funding in Indiana Larry DeBoer Purdue University October 2015 1
Funding Sources, Indiana Highway Expenditures, 2013 (thousands of dollars) Local 402,750 16% Federal 970,770 38% State 1,178,620 46% Source: Pew Charitable Trust, Research and Analysis, Funding Challenges in Highway and Transit 2
Indiana Motor Fuel Taxes Gasoline Tax 18 cents/gallon Special Fuels Tax (Diesel) 16 cents/gallon Motor Carrier Surcharge Tax 11 cents/gallon Sales Tax 7% of sales price State Gasoline Excise Tax Rates, January 2015 Washington New Hampshire Montana North Dakota Minnesota Vermont Maine Oregon Massachusetts Idaho South Dakota Wisconsin New York Wyoming Michigan Rhode Island California Nevada Utah Colorado Nebraska Kansas Iowa Missouri Illinois Pennsylvania Ohio Indiana West Virginia Virginia Kentucky New Jersey Delaware Connecticut Tennessee North Carolina Maryland Arizona New Mexico Oklahoma Arkansas Mississippi Alabama South Carolina Georgia Cents per Gallon 0 to 20 Alaska Texas Louisiana Florida 20 to 25 25 to 30 More than 30 Hawaii 3
Indiana ranks 11 th highest 54 cents/gallon 18 cents state excise 18 cents 7% sales 18 cents Federal 4
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What Determined the Changes in Indiana Gasoline Sales, 1982-2011? Avg. Change, 2001-2011 Avg. Change, Contribution Elasticities 1982-2001 to Gallons Real Income 0.8 2.6% 2.1% 0.5% 0.4% Gas Price -0.1-2.4% 0.2% 6.4% -0.6% MPG Autos -0.6 1.4% -0.8% 0.5% -0.3% Predicted (sum of contributions) 1.5% -0.5% Actual 1.8% -0.9% Contribution to Gallons Two Predictions of Changes in Indiana Gasoline Sales, 2015-2020 Predicted Change, 2015-2020 Predicted Change, 2015-2020 Contribution Elasticities to Gallons Real Income 0.8 2.0% 1.6% 1.0% 0.8% Gas Price -0.1 0.0% 0.0% 7.0% -0.7% MPG Autos -0.6 0.5% -0.3% 0.5% -0.3% Predicted (sum of contributions) 1.3% -0.2% Contribution to Gallons 7
One Penny on the Gasoline Tax Gasoline Price: $2.50/gallon Added penny increases price to $2.51/gallon Percent increase: 0.4% Gas Price Elasticity: -0.10 Change in Gasoline gallons sold: -0.04% Reduction from 2,929 million gals: 1.2 million Added revenue from one penny: About $29 million State and Local Highway Expenditures per Person, 2013 Washington New Hampshire Montana North Dakota Minnesota Vermont Maine Oregon Massachusetts Idaho South Dakota Wisconsin New York Wyoming Michigan Rhode Island California Nevada Utah Colorado Nebraska Kansas Iowa Missouri Illinois Pennsylvania Ohio Indiana District of Columbia West Virginia Virginia Kentucky New Jersey Delaware Connecticut Tennessee North Carolina Maryland Alaska Arizona New Mexico Texas Oklahoma Arkansas Louisiana Mississippi Alabama South Carolina Georgia Florida Dollars per Person Less than 400 400 to 500 500 to 600 More than 600 Hawaii 8
1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 National Highway Construction Cost Index (2003 = 1) 0 2000 2002 2004 2006 2008 2010 2012 2014 $500 Local Road Funding, Actual and Cost-Adjusted (millions of dollars) $400 $300 $200 Actual Cost-Adjusted (HW construction index, 2003 dollars) $100 $0 2000 2002 2004 2006 2008 2010 2012 2014 9
Motor Vehicle Highway Fund FY14 Revenues Motor Fuel Tax 318.1 mil Special Fuel Tax 152.6 mil Motor Carrier Surtax 46.0 mil License Fees 108.7 mil Int l Registration Plan Revenue 96.1 mil State Sales Tax 63.8 mil Total (includes minor sources) 791.6 mil 10
Motor Vehicle Highway Fund FY14 Expenses Refunds 50.5 mil State Police 7.9 mil BMV 4.9 mil Other Expenses 1.6 mil Plus adjustments 26.5 mil Net Distribution 753.4 mil Motor Vehicle Highway Fund FY14 Net Distribution 753.4 mil State Dept. of Transportation (53%) 385.2 mil Counties (32%) 250.5 mil 5% distributed equally to each county 30% based on vehicle registrations share of state total 65% based on road mileage share of state total Cities and Towns (15%) 117.7 mil 100% based on population share of state total 11
Special Distribution Account FY14 Revenues Motor Fuel Taxes 96.4 mil Special Fuel Taxes 51.4 mil License Fees 17.6 mil Total Revenues 165.4 mil Special Distribution Account FY14 State Share (55%) Highway, Road and Street Fund 90.9 mil Local Share (45%) Local Road and Street Account 165.4 mil 12
Special Distribution Account FY14 Local Road and Street Account 165.4 mil Distributed to Counties based on Auto Registration shares in state total Counties < 50,000 population to county, cities & towns based on population (20%) and road mileage (80%) Counties > 50,000 population to county, cities & towns based on population (60%) and road mileage (40%) County Road/Bridge Budgets, 2015 Budget Levy MOTOR VEHICLE HIGHWAY 281,644,768 LOCAL ROAD & STREET 40,328,183 CUMULATIVE BRIDGE 66,543,206 54,112,311 COUNTY MAJOR BRIDGE 5,021,142 8,190,395 MAJOR MOVES - TOLLROAD COUNTIES 8,728,199 TOTAL 402,265,498 62,302,706 13
City and Town Road and Street Budgets, 2015 Budget Levy MOTOR VEHICLE HIGHWAY 255,453,640 86,108,031 LOCAL ROAD & STREET 40,135,248 THOROUGHFARE 555,000 1,134,607 CUMULATIVE BRIDGE & STREET 150,000 239,798 MAJOR MOVES - TOLLROAD COUNTIES 3,683,096 THOROUGHFARE BOND 530,000 484,841 INDIANAPOLIS PUB WKS TRANS 44,563,144 TOTAL 345,070,128 87,967,277 All Local Units Road, Street and Bridge Budgets, 2015 Budget Levy MOTOR VEHICLE HIGHWAY 537,098,408 86,108,031 LOCAL ROAD & STREET 80,463,431 THOROUGHFARE 555,000 1,134,607 CUMULATIVE BRIDGE 66,543,206 54,112,311 COUNTY MAJOR BRIDGE 5,021,142 8,190,395 CUMULATIVE BRIDGE & STREET 150,000 239,798 MAJOR MOVES - TOLLROAD COUNTIES 12,411,295 THOROUGHFARE BOND 530,000 484,841 INDIANAPOLIS PUB WKS TRANS 44,563,144 TOTAL 747,335,626 150,269,983 14
Surtax and Wheel Tax Adoptions by Year Lake Porter Jasper Newton La Porte Starke Pulaski Lagrange St Joseph Elkhart Noble Marshall Kosciusko Whitley Fulton Steuben De Kalb Allen White Cass WabashHuntington Miami Wells Adams 7 Adoption Year Rescinded Before 2001 2001 to 2007 2007 to 2013 Since 2013 No Tax Benton Carroll Grant Howard Blackford Jay Tippecanoe Warren Clinton Tipton Delaware Fountain Madison Randolph Montgomery Boone Hamilton Henry Vermillion Wayne Hancock Parke Hendricks Marion Putnam Fayette Rush Union Morgan Johnson Shelby Vigo Clay Franklin Owen Decatur Brown Monroe Bartholomew Ripley Dearborn Sullivan Greene Jennings Ohio Jackson Lawrence Switzerland Jefferson Daviess Knox Martin Scott Washington Orange Clark Pike Gibson Dubois Floyd Crawford Harrison Posey Vanderburgh Warrick Spencer Perry Total revenues, 2013 Surtax/Wheel Tax Surtax $65.5 million (89%) Wheel Tax $7.9 million (11%) $73.4 million Revenues per Person $17.85 Maximum Tipton $32.43 ($25 surtax; $40 wheel) Minimum Vanderburgh $7.49 (2% surtax; $23 max wheel) At average rates, remaining counties could collect about $40-$45 million 15
Sources U.S. Highway Statistics, Federal Highway Administration www.fhwa.dot.gov/policyinformation/statistics/2013/ U.S. State/Local Revenues and Expenditures, U.S. Census Bureau, State and Local Government Finances www.census.gov/govs/local/ Indiana Highway Revenues and Distributions, Legislative Services Agency, Handbooks http://iga.in.gov/legislative/2015/publications/handbooks/ Indiana Surtax/Wheel Tax Rates, Indiana Bureau of Motor Vehicles www.in.gov/bmv/2677 16