A Libertarian Plan for Road Funding

By John Pickerill

The Indiana Department of Transportation recently estimated that Indiana needs an additional $1.2 billion in funding to properly maintain its roads. There has been much hand-wringing by the General Assembly on where to come up with this additional money. House Speaker Brian Bosma of the Republican Party leadership has proposed to raise the gasoline tax, raise vehicle registration fees, and add tolls to roads to provide the $1.2 billion. In other words, the Republican Party has decided to lay this entire burden on the taxpayers instead of doing the fiscally responsible solution of lowering government spending.The Libertarian Party proposes the following plan to fund the entire $1.2 billion without raising any taxes.

The Libertarian Party proposes the following plan to fund the entire $1.2 billion without raising any taxes. It is based first and foremost on reducing spending, specifically on unnecessary regulatory agencies, programs that interfere with the free market, and areas identified as inefficient spending. It also dedicates existing vehicle-related taxes and fees on road funding, since today a big portion of these are sent instead to the general fund and spent on a multitude of non-road uses.

Today the state government spends $190 million on so-called “economic development,” which actually does more harm than good to the state economy. It allows the government to pick winners and losers in the market by giving privileged tax breaks, government contracts, and taxpayer-funded infrastructure improvements to certain politically-connected corporations. Those corporations return the favor by funding the re-election campaigns of state lawmakers who “voted the right way.” It turns free market capitalism into crony-capitalism. It is time to end this corruption once and for all, and in doing so free up $187 million for roads.

The next area to look at is how much of our tax dollars supposedly going to K-12 education actually makes to classroom instruction and how much is spend on overhead. Andrea Neal, a member of the State Board of Education, recently identified how a decreasing percentage of education spending is actually going to classroom instruction. In her article, “Dollars to the Classroom” published by the Indiana Policy Review, she points out that in the last ten years the percentage of funding going to the classroom (teacher salaries and benefits, classroom aides, instructional books and technology, social workers, guidance counselors, and certified school administrators) fell from 61% to 57%. The rest of the money went to overhead such as maintenance, security, transportation, food services, construction, debt service, and salaries of non-certified personnel. Looking at the last year’s state budget, $8.1 billion was for K-12 education, and so using Neal’s estimation, 43% of that is overhead ($3.5 billion). By cutting this overhead by just 10% would free up $350 million for road funding, and do so without cutting any money actually going to the classroom.

Next would be to introduce the kind of fiscal discipline in the state-funded university system as what the private sector has to deal with in tough times. Get rid of top-heavy bureaucracies, and start by eliminating the $368 million Commission for Higher Learning and transfer its functions to the universities themselves. Have state universities run leaner by reducing their budgets by 15%, freeing up $229 million for roads. New construction at universities should be put on hold ($46 million) and instead focus that money on roads.

Next, eliminate regulatory agencies that do more harm than good. An easy place to start is eliminating the $50 million on the Gaming Commission and Horse Racing Commission, who make it more difficult every year for not only casinos and racetracks to run their businesses, but for philanthropic clubs like the American Legion, Veterans of Foreign Wars, Eagles, Moose, Elks, Lions clubs, etc., to operate.

All totaled, these spending cuts would free up the entire $1.2 billion needed for INDOT’s recommended road funding requirements. There is no reason to saddle Hoosier drivers with hikes on a gas tax, vehicle registration fees, or more tolls on roads. In all the time the two political parties in the General Assembly have been in power they have failed to come up with a sustainable road funding plan.

They’ve had their chance. It’s now time for a new plan. The Libertarian plan.

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