New state law allots $50M for Indianapolis roads but can't be used for sidewalks, bike lanes
A state matching grant program could bring $100 million more a year to Indianapolis roads, but not to its sidewalks and bike paths.
The city's 8,400 lane miles are chronically underfunded because the state's road-funding formula allots the same amount to a two-lane road and a six-lane road.
The new law allows Indianapolis to triple certain taxes on vehicles to raise more revenue for roads.
A new state law offers Indianapolis an additional $50 million in state funding each year to improve the city's battered roads. But the money, which could prove difficult to obtain, comes with strings attached that outlaw its use for increasingly popular traffic-calming changes like narrower streets, bike trails and sidewalks.
Under House Bill 1461, Indianapolis can access up to $50 million a year from the statewide Community Crossings grant program, starting in 2027. Signed into law by Indiana Gov. Mike Braun May 1, the bill also increases speed limits on Interstate 465 from 55 to 65 miles per hour, effective July 1, 2025, and offers other local governments tools to expand their road budgets.
To receive the money, Indianapolis must match any dollars the state provides, meaning the city could see up to $100 million more a year for roads by 2027. But an amendment by State Sen. Aaron Freeman, R-Indianapolis, requires the city to match the state with new funding outside of its transportation and public safety budgets, a city spokesperson confirmed, which are two of the city's largest annual expenses.
The 2025 city-county budget was more than $1.6 billion, with nearly $1 billion devoted to public safety services including the Indianapolis police and fire departments, the Marion County sheriff's and prosecutor's offices, and Marion County courts. The city allotted nearly $200 million to roads, bridges and greenways in 2025.
The amendment also prevents Indianapolis from using the state's $50 million for five purposes: "reducing the capacity of existing roads and streets; greenways; bike lanes; bike trails; and sidewalks."
Some pedestrian advocates say that provision creates an incentive for the city to maintain larger roads instead of reducing lane counts, which could decrease maintenance costs and improve overall traffic safety.
The new state money won't solve Indy's pothole problem. A 2022 city-commissioned study found Indianapolis would need to spend more than $500 million a year to improve its roads to fair condition.
Regardless, city leaders are praising this bill for giving Indianapolis a larger share of state dollars. Indianapolis Mayor Joe Hogsett called the legislation "the most significant new investment from the state of Indiana into Indianapolis road infrastructure in decades."
The city has 8,400 miles of pavement but currently receives state funding for only 3,400 "center-lane" road miles. That discrepancy stems from a road-funding formula that disregards lane counts, sending the same amount of money to a two-lane road in a rural county and a six-lane road in Indianapolis.
Can the city match up to $50 million in state funding?
City officials will work in upcoming budgeting sessions to figure out how Indianapolis can shift money around to make the most of the state's contributions, Department of Public Works Director Todd Wilson said in a statement.
The legislation allows the city to raise money by tripling wheel taxes on large commercial vehicles and excise taxes on smaller personal vehicles, but city leaders have not signaled whether they intend to do so.
The bill raises the city's wheel tax limit from $80 to $240 and the excise tax limit from $50 to $150. Under the current limits, however, Indianapolis and Marion County still leave a combined $67 million in potential revenue on the table by charging less than the maximum allowed.
"I don't see the need for us to raise our wheel tax to come up with that $50 million when we have a $1.65 billion budget, probably going up to $1.7 (billion) this next year," Republican Indianapolis City-County Councilor Joshua Bain said during an April 17 public works meeting.
Democratic Councilor Jared Evans said that budgeting more money toward roads will be especially challenging because the city faces millions of dollars in lost property tax revenue after the passage of Senate Bill 1.
"While it's good for the roads, we also know we have some cuts coming due to the property tax bill," Evans said in the same meeting. "I don't think it's going to be an easy thing to achieve."
In a May 2 emailed statement, Indianapolis City-County Council President Vop Osili said he expects the city to benefit from the full $100 million available each year under the new law.
"For too long, limited funding has prevented us from addressing the full scope of our city's infrastructure needs," Osili said. "With this additional support, more streets will be repaved, more neighborhoods will be revitalized, and more residents will experience a higher quality of life."
Why the money can't go toward "road diets," bike lanes, sidewalks
While a potential boon for motorists, pedestrian advocates criticize the law for limiting road improvements that enhance safety for all users. The city has redoubled its commitment to such changes in recent years with the Vision Zero plan to reduce traffic deaths and the 2022 overhaul of its Complete Streets ordinance, a policy requiring city planners to design streets with all travelers in mind.
Many multi-lane roads in Indianapolis see less traffic since the advent of the interstates, local urban designer Jeffery Tompkins told IndyStar, yet the city is stuck with about 8,400 miles of pavement. Barring spending on "road diets" to remove lanes and add more bike paths and sidewalks, as the city will do south of downtown on the six-lane Madison Avenue, upholds a status quo that Indianapolis can't afford to maintain, Tompkins said.
"If I was a city leader with deferred maintenance of thousands of lane miles that I couldn't pay for," Tompkins said, "I think that maybe it would be a better idea to get rid of some of those lane miles that aren't serving my population."
Anthony Cherolis, executive director of Bike Indianapolis and the Central Indiana Bicycling Association, criticized Freeman in an emailed statement for "state-level meddling in local design details" that would enhance road safety for motorists, pedestrians and cyclists.
Freeman did not respond to IndyStar's request for comment. In the 2024 legislative session, Freeman fought unsuccessfully to stall IndyGo's Blue Line bus route, arguing it shouldn't reduce lanes for car traffic on Washington Street.
State Sen. Fady Qaddoura, D-Indianapolis, said he voted in favor of the bill despite Freeman's amendment because Indianapolis can't afford to miss out on $50 million in state money after decades of underfunding.
"I'm excited for any piece of legislation that helps us address the backlog of roads and streets that need to be repaved and reconstructed, especially residential roads," Qaddoura told IndyStar.
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