PERU – Driving back from Lake Michigan on Labor Day, the need to finish the U.S. 31 freeway was apparent, as traffic stacked up at each of the four traffic lights in Miami County, and others in Tipton and Hamilton counties. And Indiana’s highway spine courses through sorghum-slow broadband areas.

So on the face of it, Gov. Eric Holcomb’s announcement of a new $1 billion investment called Next Level Connections in highways, ports, international flights and universal broadband seemed prudent.

With one exception: On the highway aspect, many of us felt that HEA1002 from 2017 had set up the state’s highway funding for the next two decades. We pay 10 cents more a gallon of gas, and we were supposed to get better roads. But it is coming up short. So much so that Indianapolis Mayor Joe Hogsett and the City-County Council had to float $120 million in bonds this week to deal with the capital city’s cratering streets. We figured that multi-billion dollar effort – accomplished with gas and diesel fuel taxes along with others on electric cars – would pay for Section 6 of I-69 and the U.S. 31 stops.

But it didn’t. It’s kind of a bait and switch. If you’re an Indianapolis gas consumer, you’re now getting double-dipped. And why doesn’t HEA1002 cover Section 6?

So the Tuesday surprise was that without a debate in the General Assembly or with taxpayers, with only a vote from the State Finance Authority later this month, the Holcomb administration is leveling another tax increase, this one on heavy trucks using the 157-mile Indiana East-West Toll Road. It’s a 35% tax increase, this one coming on the heels of a 20-cent-per-gallon hike on diesel fuel just a year ago.

On WIBC Thursday, Holcomb said it wasn’t a “tax increase” and acknowledged that the vendor, Indiana Toll Road Concession Company, actually initiated the talks. "We didn't do the deal to 'tax truckers'," Holcomb said. "We did the deal because it was brought to us." Since the original Major Moves deal 12 years ago under Gov. Mitch Daniels, the private toll road companies have struggled financially, with the original company going bankrupt. So this has the markings of a bailout as ITRCC will also benefit from the increased tolls trucks would pay. 

At first glance, this appears to be a burden shouldered by big rig truckers on the toll road. But Gary Langston, president of the Indiana Motor Truck Association, says that not only will consumers ultimately pick up the costs, what will likely happen is that truckers will opt for alternative routes of U.S. 20, SR 120, U.S. 12 in Michigan and the region, or I-94.

Langston was an early partner in HEA1002 in 2017, with the IMTA an early and enthusiastic backer. But he feels blind-sided today. “It was a tremendous surprise last week coming out of the Labor Day holiday to hear with only an hour-and-a-half notice that the governor was going to announce something of this magnitude,” Langston said. 

“There’s nothing more important to the trucking industry than good infrastructure. We’ve always been on board with efforts to make it better. We were on board,” Langston explained. “It had been 30 years since diesel fuel taxes had increased. They said, ‘Let’s raise them 20 cents’ and we said, ‘Let’s do that.’ Let’s use the money to fix the roads. That was a big amount, the largest increase in the nation along with California. It made Indiana the fourth-highest gas/diesel fuel tax in the nation, behind Pennsylvania, California and Washington state. But we were right there with them. There were some tough negotiations, but we were proud we got that done. The governor said, ‘This is a 20-year plan we got here. This is going to sustain us for … 20 years.”

But just a year later, Holcomb was seeking even more revenue. And this time, there were no negotiations. 

“To find this week, only two months after that plan was enacted on July 1, they start secret negotiations to find another billion dollars,” Langston said. “And only off of trucks.”

“Since I have come here, I have worked hard to establish relationships with the governor and state agencies, particularly INDOT, and we’ve made success and progress in that,” Langston said. “We find every time when we work together, we get a better solution and we don’t spend as much money and don’t have to spend as much money to do over things that weren’t under consideration. For this to happen like this, you know INDOT was involved, you know the governor was involved, and according to what I read, the Indiana Toll Road Concession Company came to the governor and said, ‘Let’s open up negotiations’ which is just unbelievable to me.”

So, on Sept. 20, the Indiana Finance Authority Board will vote to approve a tax increase, with virtually no debate, effective on Oct. 5.

Asked about other financing options, Holcomb press secretary Rachel Hoffmeyer told HPI on Wednesday, “We are not discussing negotiations.”

Hoffmeyer added, “Tolls paid by commercial vehicles will still be much lower than those paid in Illinois and Pennsylvania and close to those paid along the Ohio Turnpike. The Indiana Toll Road is a great value.”

Isn’t the tax burden falling on out-of-state truckers? 

Langston explained, “There’s no question the Indiana toll road is one of the primary trade corridors in the nation. Yes, there are a lot of out-state trucks that move across there. But you have to keep in mind what they’re hauling. They’re hauling everything that you have. At some point, it ends up on a truck. So the cost of transportation goes up. We won’t absorb it. We have to pass it along. The governor believes no one else will suffer from this, and that’s absolutely not true because it bounces off trucks and eventually into the pockets of consumers.

“The number of letters and phone calls I’ve received from Hoosiers, and Hoosier truckers and companies are giving me dollar figure impacts,” Langston said. “Most truckers are independent contractors. They’re the guy who buys the truck and then tries to make a living. That’s who most of those on the toll road are, independent contractors. So when you raise the one-way rate from $16 to $34 one way, that’s a lot for them. It’s a direct impact on the small business person that isn’t being considered.”

“This is nothing more than an additional tariff,” Langston said.

He called the 35% increase “absurd,” adding, “They’ve opened this up and added 35% on trucking. In the mid-90s, the Ohio Turnpike folks raised their rates by an absurd amount. The diversion was so great that in the late 90s that they couldn’t keep up with the maintenance on the secondary roads, safety was horrible. People were getting killed because of the congestion, to the point where the state police lobbied the governor and legislature to lower the rates and get the traffic back on the toll road where it needed to be. They did, in fact, do that.”

“When they raised those rates, the overall revenue decreased because of the diversion,” Langston said. 

Does Langston have a message for the Finance Authority? “Take a look at your own webpage,” he said. “That talks about us having a strong competitive advantage when it comes to reaching North American markets. They may have to change that because our competitive mission here in the heartland is going to be changed significantly. I see this as a precursor to the $10 million study that happens in Dec. 1, which says, ‘Oh yeah, did we mention I-65 and I-70 and our plan there? I don’t know that many $10 million reports that don’t describe what the person who commissioned the study is looking for.

“As Hoosiers we have to be concerned about what happened here,” Langston continued. “If the governor has the authority to just arbitrarily open up this agreement and take another billion for whatever he wants the money for, why would we not think he won’t do that again? We get another billion dollars and the ITRCC gets another 63 years of an absurd toll rate increase. We need to be concerned about what to expect in the future.”

Holcomb has long prided his administration as one of transparency while providing good value to taxpayers. Those concepts are taking a hit this month.