INDIANAPOLIS — Lawmakers at the statehouse are working on legislation to provide more road funding options for local communities. Still, some proposals are drawing criticism due to their potential impact on residents' wallets.
"At a minimum, Indianapolis needs an excess of $200 million more per year," Dan Parker, Chief Deputy Mayor of the City of Indianapolis, said
House Bill 1461 aims to address this funding gap by allowing local communities to implement more road funding options.
The bill would permit the establishment of additional toll roads and enable Indianapolis to triple its "wheel and excise tax," a fee paid upon car registration. It would also allow local municipalities to impose a new tax on retail deliveries among other things.
Indianapolis city leaders have been long-time critics of how the state distributes funding to local communities.
According to the city, 23% of the Indianapolis workforce commutes from surrounding areas. They say that equals out to around 160,000 people commuting every day.
The city believes the funding formula should change.
Right now, the amount of money the city gets from the state is measured by the center line mileage, or a measurement of the length of a road, rather than how much traffic Indianapolis roads see.
"Road funding should follow traffic," Parker said.
That option isn't on the table at this time. However, a tax increase on retail delivery is. It would allow local municipalities to increase the tax on retail deliveries anywhere from fifty cents to a dollar per order.
Michael Fair, a delivery driver for a year, voiced his concerns over the tax increase. He thinks it's a bad idea.
"It would make it harder to be able to afford the cost of living if it went up because we hardly make anything as it is," Fair said.
Fair believes that an increase in delivery fees would decrease demand for services. Companies like DoorDash agree.
According to DoorDash, if counties across the state adopt this tax, it could lead to a $49 million loss in revenue for merchants. Along with that, they predict that residents would pay $28 million more in additional taxes annually and nearly $15 million would be lost in Dasher earnings.
Fair predicts that many drivers would leave the profession.
"I'd say at least 60% of people would quit," Fair said. "I don't see a lot of people still wanting to go through it. I don't know that I even would."
Concerns extend to the business community as well.
Natalie Robinson of the National Federation of Independent Business testified in opposition to the delivery tax.
"This could stifle small businesses that are trying to remain competitive," Robinson said. "This would also be another blow for everyone, consumers and businesses alike, who are currently struggling with inflationary pressures."
For the tax to take effect, local municipalities must adopt the fee.
The bill did get a vote on Monday, but lawmakers are expected to vote it out of committee at a later date.
In the meantime, DoorDash has been urging customers in Indiana to reach out to their local lawmakers to show their opposition to the proposed tax option.
The company says so far 1,000 people in Indiana have submitted a show of opposition to the legislature.
You can learn more about that effort by clicking here.
