Wednesday, January 07, 2015

Legislation Would Let Motorists Deduct Tolls Paid To Ohio River Bridge Boondoggle

Indiana taxpayers were already funding the lion's share of the costs of constructing two new bridges over the Ohio River Bridge thanks to a one-sided agreement former Gov. Mitch Daniels negotiated with Kentucky officials. Not only are Hoosiers shouldering a disproportionate share of the constructions costs for the two bridges, but they will also pay a disproportionate share of the tolls to be collected from motorists who use the two bridges since far more Hoosiers commute into Louisville regularly than the number of Kentuckians traveling to Indiana. The need for these two new bridges was never justified before they were taken using the en vogue P3 method of publicly financing infrastructure projects..

Under legislation sponsored by Sen. Ron Grooms (R-Jeffersonville), immediately neighboring Hoosier motorists would be allowed to take a deduction on their income taxes for a portion of the bridge tolls they pay each year, thereby shifting part of the burden of paying the tolls to state taxpayers. SB 258 allows motorists residing in Clark and Floyd Counties who pay at least $100 in tolls annually for which they are not reimbursed to take a deduction of up to $500 on their state tax returns. The annual cost of offering the deduction could be as much as $1 million according to a fiscal analysis prepared by the Legislative Services Agency, an amount which would grow 3% to 5% annually thereafter once implemented in 2016.

The fiscal analysis estimates that deductible toll payments will range from $20 million to $32.5 million annually for 8 to 13 million trips. The revenue loss is calculated by applying that amount to a state income tax rate of 3.23%. The deduction is arbitrary in that it precludes Indiana motorists residing in counties other than Clark and Floyd who also commute into Louisville daily from receiving the tax break afforded to residents in those two counties.

I don't blame Sen. Grooms for sponsoring the legislation. I'm sure his constituents are up in arms about having to pay the costly tolls during their daily commutes to Louisville, something they've never been required to do up to now. By shifting those toll costs to the state, that means less money the state will have to fund other state government operations. Even worse, if the tolls prove inadequate to cover the debt service on the bonds, the state's highway fund will have to serve as a backstop to pick up the shortfall, meaning less money for highway projects elsewhere around the state. This is what happens when major public works projects are driven by big campaign contributors rather than serious public policy planners.


Anonymous said...

I know I am tilting at windmills but my blood boils anew at every factual story reminding me how devoid of ethics and honesty I came to believe Mitch Daniels was with just about every deal he pushed through. That little multi-millionaire Napoleon got my vote once... but only once.

It's always we little people who pay for Republican and Democrat "public works" projects... especially those thoroughly BS "public-private partnership" scams.

And they want to know why many of us no longer vote at all... why bother...why waste time going to the polls? Voting has become an exercise in futility.

Anonymous said...

Leave it to Indiana to stick a toll on a major North-South Interstate that has never seen a toll and will be nothing but a speed bump to progress..

Looks like time to route traffic through Cincinnati or up I-55.

Indiana is an embarrassment.

Anything to get Mitch's friends paid.

Anonymous said...


Does this look legit to you?

Anonymous said...

New Albany and Floyd County locals know to not use the Kennedy (I-65) bridge anyway. They take the Sherman Minton (I-64) which will remain free to cross.

Now just watch as soon as the bridges are done, suddenly another crack will appear in a bridge beam causing the Minton to shut down for year or more.

A cynic could say INDOT/KYTC could "Cline Avenue" the Sherman Minton and reroute I-64 across I-265... By Cline Avenue I mean claiming a bridge was beyond repair and instead of fixing it, tear it down. Except Cline Avenue was the only multi-lane, limited access alternative to the Toll Road. When shorty leased out the Toll Road, he had to get rid of easily used nearby alternate routes. Bye Bye Cline Avenue.

Anonymous said...

Very perceptive, 9:53. I'm glad others recognize the Cline Avenue scam.

As Shermageddon is under USDOT jurisdiction and is the lifeline for the entire West End of Louisville, closing it would be tougher sledding.

Plus, all of Georgetown and New Albany would die without that bridge.