Statewide Trail Map 2016 (PDF, 11.3 MB)
The Funding Subcommittee of the Indiana Bicycle Trails Task Force met August 8, 2018 in Indianapolis to approve innovative funding strategies for trail development. The Task Force was created in 2017 by an act of the Indiana General Assembly to study these measures, as well as safety and route connections.
Based on the conclusions of the subcommittee, the Greenways Foundation has created its Greenways Foundation 2019 Legislative Platform (PDF, 220 KB).
These were the subcommittee’s conclusions on potential funding mechanisms, including the final vote indicating their preferences to present before the state legislature.
Options are tax write-offs and/or credits, naming rights, marketing, and other forms of visibility.
Sporting Goods Sales Tax
A sporting goods sales tax would not be a new tax, but rather a diversion of a percentage existing sales tax revenue. This funding method would allow recreationists, such as cyclists, to pay for their infrastructure, like trails. This is already being done for some items on a federal level as well as in states like Texas. An estimated 348,000 bikes are sold in Indiana each year, with an average price of $100 for $2.34 million in sales taxes annually. This may add a further complication to the existing tax structure or would require another level of administration approval.
State Gas Tax
Two potential funding sources could be derived from the existing state gas tax. Option A would estimate of gasoline usage by off-road vehicles (ORVs) and snowmobiles and take a percentage of the state gas tax revenue that would be diverted to the construction and maintenance of trails. Such a program could mirror or be very similar to the Federal RTP program or states that already do this, which funds both motorized and non-motorized trails. Using the same formula the RTP program uses, it was estimated that an additional $812,000 would be available for trails annually. Option B is a small percentage (1% – 2%) or set amount of state gas tax funds could be dedicated for bicycle and pedestrian projects, such as trails. Currently, this is being done in states like Tennessee and Pennsylvania respectively. It is estimated this would set aside in between $2 – $4 million towards bicycle and pedestrian projects in Indiana annually. INDOT’s support for such a policy would be necessary, which in turn might be dependent on high levels of public support.
Real Estate Transfer Tax
Indiana was one of eleven states that did not currently have a real estate transfer tax. She noted most states typically involve the collection of $1 – $3 tax per $1,000 in real estate transactions. Over ten states are currently using these funds for recreation as a key part quality of place and life initiatives. Since this would be a new tax, the implementation of such a program would require legislative action and would likely encounter opposition from anti-tax groups as well as the Realtors Association. Task Force members ultimately felt that the implementation of such a tax would be an ‘uphill battle,’ but remained interested in the idea due to the consistent and substantial funds that it would produce. This tax could also be used like a TIF district on a local level so that nearby landowners could help pay for trails development projects with a transfer tax since they would be the one most benefited by it.
Sin taxes, in which revenue from the taxation of sports betting, cigarettes, and other ‘vices’ could be used to fund trails. One such tax is a sports betting tax. Sports betting has not yet been legalized, but is likely to go to the State Legislature in the spring of 2019. Other advocacy groups are also looking closely at this possibility, and could be worked with, but alternatively might become a source of competition. The amount of revenue that would be produced is uncertain, but it would likely be substantial.
The funds resulting from general appropriations could be substantial and allow for the completion of major projects. In Indiana, this occurred in 2006 when Governor Daniels allocated $20 million for the State Trails Program. This action benefited 28 trail projects, allowed for the construction of 104 miles of trail as well acquisition of land for future trails. In New York, $200 million was allocated by their legislature for the Empire State Trail in 2018. This type of funding source can be transformative and highly beneficial to the development of trails, but is more sporadic, harder to plan for, and may only occur once over the course of many years.
These involve utility companies leasing easements on trails for the development of phone, water, sewer, fiber optic, and cell tower infrastructure. In these scenarios, utility companies would pay substantial sums of money to local or state governments for an easement or lease on land for their infrastructure. For example, AT&T pays $7,000 per mile to run fiber optic cable on a trail in Northern Virginia. Similarly, some cell phone towers can pay as much as $150,000 per year to local or state governments. These figures do not necessarily represent the amounts that would be paid here in Indiana, however they do provide a range to understand this amount of money would mostly likely only pay for operation, maintenance, and limited development. Since infrastructure needs are determined on a local scale, it’s best for this type of funding to be the decision of the local trail manager.
Waste Tire Fee
There is currently a $0.25 fee on each tire purchased in the State of Indiana. The resulting funds are administered by Indiana Department of Environmental Management (IDEM), who uses them to manage waste tires through clean ups and recycling programs. In 2011, the fee brought in $1.3 million, and appears to bring in between roughly $1.3 – $2.3 million per year. The last known grant for a cleanup occurred in 2009. Grants have practically dropped in recent years due to all major sites being cleaned up. Also, the fee of $0.25 is quite low and the possibility of the fee being raised to $0.50 per tire would be manageable for most people. These funds would require involvement from the legislature as well as support from IDEM.
Tipping Fee/Environmental Penalties
Tipping fees in Indiana are currently at $0.60 per ton of waste. This amount is quite low compared to other states, and a modest increase to $1.00 would put it more in line with neighboring states. An increase in the fee would encourage more recycling as well as discourage other states from dumping in Indiana. Additionally, the extra monies could fund both recycling programs and trail development — a zero-emission infrastructure.
An increase could further fund healthy living initiatives such as trails. The tax currently stands at $1 per pack (plus regular sales tax), but could be increased to $1.50 – $2 if recently introduced legislation passes. Funds from the cigarette tax going to trails have a clear link due to the connection between public health, increased trail usage, and lower smoking rates. There might be competition from other groups wanting the funding, such as more traditional health related initiatives.
These are fees users of the trails would pay for some additional services, like premier parking. This would be a difficult option to enforce, and might be unpopular with some users. Additionally, it seems more suited for maintenance rather than development in terms of amount user fees would raise. However, a program similar to a ‘Friends of the Trail’ or a Trail Town Program could be implemented. This was something that would have to be implemented be each individual trail manager.
The Indiana Bicycle Trails Task Force Funding Subcommittee voted on the above measures. They used a ballot to rank each funding source from 1 (best) to 11 (worst) and strategies from 1 (most preferred) to 5 (least preferred). They could mark a X to show they did not feel like the idea was worth pursuing. The results will be used to create a list of recommendations for the BTTF to adopt. After tallying the vote, the results were as follows:
1. Tipping Fee/Environmental Penalties (Score: 34)
2. (tie) Public-Private Partnerships (Score: 37)
2. (tie) Waste Tire Fee (Score: 37)
3. General Appropriations (Score: 42)
4. Sporting Goods Tax (Score: 46)
5. State Gas Tax (Score: 62)
6. Sin Tax (Score: 77,)
7. Real Estate Transfer Tax (Score: 86)
8. Utility Easements (Score: 95, 3 Xs)
9. Cigarette Tax (Score: 106, 4 Xs)
10. User Fees (Score: 118, 5 Xs)