Budgeting and Appropriations

Biennial enactment of two 12-month budgets; fiscal year begins July 1.

Bonding or Pay-as-You-Go

Combination of bonding and pay-as-you-go financing. The state has two bond payment funds. The revenue from these funds is being used for repayment only, and is not available for further bond issues. The State Highway Fund does not have authority to use funds for debt repayment.

State-Level Funding Provided for DOT Budgets

FY 2011 (approved): $1.54 billion
FY 2010: $1.10 billion
FY 2009: $1.33 billion
FY 2008: $1.07 billion

Allocation of Federal Transportation Funds to the DOT

Federal transportation funds are allocated to INDOT as a state legislative appropriation at the program or category level. The three divisions in the budget bill are intermodal operations, highway operations and distributions to local units of government. Each division has subdivisions and account number identifications for appropriations. The accounts include functions rather than specific projects. For example, appropriations are made for Highway Maintenance Work Program or Right-of-Way Purchasing.

Allocation of State Transportation Funds to the DOT

As with federal funds, state transportation funds are allocated to INDOT as a state legislative appropriation at the program or category level.

Traditional State Funding and Finance for Highways

Fuel taxes; additional sales taxes on gasoline or diesel; vehicle registration/license/title fees; tolls.

State Funding and Finance for Other Modes

Transit and rail: General sales tax; situs tax. Of the proceeds from the sales and use tax, 0.67 percent goes to the Public Mass Transportation Fund; 0.029 percent to the Industrial Rail Service Fund; and 0.123 percent to the Commuter Rail Service Fund. Rail also receives revenues from railroad property taxes. Ports: Fees, tolls, rentals and other charges (Ind. Code Ann. §8-10-1-17).

Innovative Transportation Funding and Finance

State infrastructure bank (federally capitalized); PPPs (authorized in statute with legislative approval requirements, used for the Indiana Toll Road); impact fees. In relation to PPPs, the state also uses proceeds from lease of the Indiana Toll Road for transportation projects.

Dedicated/Restricted State Funds and Revenues

Fuel tax receipts are statutorily dedicated to highway and road purposes, including traffic safety (Ind. Code Ann. §6-6-1.1-801.5). The State Highway Fund is a dedicated fund for construction and reconstruction of state highways (Ind. Code Ann. §8-14-2-2, §§8-23-9-54 et seq.).

DOT Authorized to Retain Surplus Funds

Funds in the Major Moves Construction Fund and the State Highway Fund remain in the accounts at the end of the year.

Legislative Approval Required to Move Funds Between Projects

The State Budget Committee is responsible for approving transfers between line items. The overall budget makes appropriations to INDOT and not to specific projects, so INDOT can move funds between projects with federal approval.

Transportation Funding Allocations through Local Aid

Various transportation-related revenues are allocated to local entities by statutory formula. Revenues allocated through the Motor Vehicle Highway Account of the state general fund-after set-asidesare distributed 53 percent to the State Highway Fund; 15 percent to cities and towns by a statutory formula based on population; and 32 percent to counties by a statutory formula based on equal distribution, road mileage and vehicle registrations. These funds must be used for certain highway, bridge or street purposes, but cannot be used for any toll road or toll bridge project (Ind. Code Ann. §8-14-1-3). Proceeds from $0.01 of the gasoline tax and 30 percent of the revenues that go through the Special Distribution Account also are distributed to local entities according to this formula (Ind. Code Ann. §6-6-1.1-801.5 and §6-6-2.5-68). Another 30 percent of the Special Distribution Account and 45 percent of the Highway Road and Street Fund are distributed to counties by a formula based on vehicle registrations, population and road miles (Ind. Code Ann. §6-6-2.5-68 and §8-14-2-4).