Strategic legislative revisions aid renewed Indiana drive for tolling

Indiana Gov. Mike Braun’s administration is getting serious about tolling to make up for falling fuel tax revenue and upgrade aging highways — eight years after former Gov. Eric Holcomb’s administration backed away from the prospect.

The Indiana Department of Transportation (INDOT) “is working closely with the governor’s office, looking at different options: routes, the tolling process, the application, all of it as a whole, to see what makes the most sense (and) where need is greatest,” the agency said.

The governor’s office confirmed its interest.

“No decisions have been made,” Chief of Staff Josh Kelley cautioned.

“But tolling has to be considered to maintain our current and future infrastructure and we are exploring all potential options,” he added.

Strategic changes housed in recently approved legislation could give those efforts a boost.

But the loosened restrictions have sparked opposition from cash-strapped Hoosiers — and those already paying tolls along borders with Illinois and Kentucky.

And it’s not as easy as simply adding tolls to existing interstates.

U.S. law generally bans user fees on federal-aid highways, including those that make up the Interstate Highway System.

There are exceptions, of course.

One program allows tolling on new highways, bridges and tunnels, plus on new lanes, as long as the number of toll-free lanes doesn’t decrease. Reconstructed or replaced bridges and tunnels also qualify.

Another program lets states toll high occupancy vehicle lanes. The Federal Highway Administration (FHWA) also offers two limited-slot pilot programs.

Familiar terrain

Tolling-curious Indiana has been down this road before.

Fuel taxes produce more than 82% of Indiana’s transportation infrastructure dollars. But Indiana is just 140 miles wide on average, so those who drive through without filling up don’t pay in.

And uptake of fuel-efficient and electric vehicles is expected to cost the state millions, jeopardizing maintenance and expansion plans for vast stretches of crumbling asphalt and concrete.

Lawmakers in 2017 recognized that long-term challenge, advancing legislation that gave Holcomb the power to add tolls. The law also mandated detailed examinations of the concept.

One feasibility study, produced that year for INDOT, estimated that a statewide interstate highway tolling program would have an 85% chance of generating upwards of $39 billion between 2021 and 2050.

It further reported a 50% chance that revenue could exceed $53 billion over that timeframe. The estimates didn’t include the likely significant costs to install and maintain tolling gantries, process payments, provide customer service, enforce collections and more.

Also that year, INDOT produced a strategic plan exploring how it could implement that tolling program.

One of the law’s related requirements — that Holcomb’s INDOT seek federal approval for the tolling initiative — wasn’t fulfilled, the agency confirmed to the Capital Chronicle.

A 10-cent fuel tax hike, accompanied by six years worth of inflation-indexed increases capped to a penny each, did go into effect. In 2023, his last year in office, Holcomb authorized a three-year extension.

It’s just a stop-gap.

“The public has made it very clear nobody wants to pay more for anything right now,” Build Indiana Council Executive Director Brian Gould said. But, he added, “If we continue to look at the model that we operate under right now, we likely would have been talking about a 30-cent gas tax increase this year.”

“So, in order to keep that off the table and keep the plan solvent, you’ve got to look at other funding mechanisms that are out there,” continued Gould, whose industry group seeks sustained funding for Indiana roads and bridges.

That’s why Braun is getting more serious about tolling.

“It’s going to have to be considered because, otherwise, I don’t think we can maintain our main arteries. Asking for the ability to do it doesn’t mean you’re going to do it comprehensively,” he said at a Munster luncheon this month, WTHR reported. “You do it selectively, where the need is the greatest.”

Roadblocks removed

Tucked among House Enrolled Act 1461‘s myriad local funding tweaks are detailed revisions to Indiana tolling laws.

Lawmakers, for example, nullified a ban on new tolls within 75 miles of interstate highways and bridges that already had tolls in 2017. INDOT said the change “provides some more flexibility in terms of locations.”

But Hoosiers already living near tolled facilities object.

Driving the 70-year-old northern Indiana Toll Road‘s 157-mile span costs the typical passenger vehicle more than $15 and can approach $100 for the heaviest-duty, six-axle vehicles. Crossing any of three RiverLink bridges to the south — tolled since 2016 — costs between $2.61 and $15.61 a pop, depending on payment and vehicle type.

The prohibition previously shielded Rep. Wendy Dant Chesser’s Kentucky border community from new additions as far up as Columbus, Indiana.

Now, the Jeffersonville Democrat said, “We could be tolled at mile marker one.” She warned that more tolls in the area would prompt “a lot of noise.”

In some instances, what was stripped out of law is “about as important” as what was added, Gould said.

Careful deletions in House Enrolled Act 1461 also allow the Indiana Finance Authority to take on debt to pay for transportation infrastructure projects, effective July 1.

That is “something that’s not been an option for INDOT for almost two decades,” Gould said. The changes, he added, will let the state leverage its AAA credit rating to finance projects upfront, then use tolling revenue to pay the debt — “easing the burden on Hoosiers.”

“We were almost working in reverse order, because so much of what the state was trying to get to was actually in existing law (as) a prohibition,” he said.

Other tweaks removed requirements that lawmakers specifically authorize certain tolling-related activities.

INDOT said it hadn’t yet narrowed down which exceptions or facilities it was considering.

The agency is “still … casting a wide net, looking at all options, as we move forward,” it said.

Implementing tolling would be a “multi-year process,” per INDOT.

Gould said that in between now and then, “Hoosiers can expect to see major reconstruction of those interstates and expanded capacity. So I think people should likely be pretty pleased with what they see, not happy about paying for it.”

The Indiana Capital Chronicle is an independent, nonprofit news organization that covers state government, policy and elections.