The Funding Indiana’s Roads for a Stronger, Safer Tomorrow (FIRSST) Task Force convened last week, kicking off an effort to review and update a road funding plan that was enacted by the Legislature more than five years ago. The panel, which is made up of legislators and lay members representing various industry stakeholders, heard from the Indiana Department of Transportation (INDOT), Metropolitan Planning Organization Council, Local Technical Assistance Program, Build Indiana Council (BIC) and the Joint Transportation Research Program, among others. The FIRSST Task Force may consider recommendations this year, but no official legislative proposals are expected until the 2025 legislative session.
Chris Creighton, chief of staff at INDOT, highlighted the department’s achievements under House Enrolled Act 1002-2017, which includes the resurfacing of 2,800 center lane miles of roadway and the replacement of 480 large culverts. Major ongoing projects include the expansion of I-65 and I-70, with 84 miles already completed. He further remarked that CNBC has ranked Indiana among the top five for infrastructure over the past seven years.
Despite the accomplishments, challenges loom large. INDOT’s budget for FY2024 stands at a record $3.7 billion and approximately 82% of its revenue is derived from motor vehicle fuel taxes. Record budgets aside, inflation, especially post-COVID, is greatly impacting construction costs. The average inflation rate over the last eight fiscal quarters has been a staggering 32.5%. Furthermore, the shift towards electric vehicles (EVs) and alternative fuels poses a potential threat to revenue derived from motor fuel taxation.
These fuel consumption trends and increased EV/alternative fuel vehicle adoption were noted as major drivers for review of road funding policies. Brian Gould, speaking on behalf of the BIC, noted that beginning in 2025, motor vehicle fuel consumption is expected to decline. This is due to greater fuel efficiency of new vehicle models, based largely on higher corporate average fuel economy standards, as well as growing adoption of hybrid and all-electric vehicles. INDOT estimates that by 2038, perhaps 50% of registered vehicles in the state will be electric, leading a revenue decline of more than $1 billion.
The task force meeting underscored the importance of continuous investment in infrastructure for economic vitality. With the expected trends in fuel consumption, EV adoption and inflation, the state needs to recalibrate its strategies to ensure sustainable funding for its transportation projects. Collaboration with local governments, data-driven approaches and exploring alternative revenue generation methods will be crucial in navigating the road ahead.
