GREENFIELD — The governor doesn’t want to raise taxes to support road projects, while lawmakers point to a possible hike in gas tax as a long-term funding option.
Local lawmakers said state leaders likely will need to find a compromise between the two Republican funding options for road improvements in 2016.
A road funding proposal from Republican leaders of the Indiana House calls for increasing the state’s gasoline and cigarette taxes while Republican Gov. Mike Pence has proposed a $1 billion highway funding boost over four years by drawing money from the state’s cash reserves and taking out loans.
Sen. Mike Crider, R-Greenfield, said it’s too early to say whether he’d support either proposal, but lawmakers should consider blending the two to address immediate road concerns when they return to the Statehouse in January.
A plan outlined this week by House Speaker Brian Bosma, R-Indianapolis, who represents a portion of Hancock County, would add about 5 cents a gallon to the state’s gasoline tax and increase the state’s per-pack cigarette tax by $1 to help shift all of the current sales tax on gasoline to funding road projects.
Indiana’s 18 cents-a-gallon gasoline tax has not been increased since 2002. Bosma said the plan would account for the past 13 years of inflation as well as ensure the tax automatically changes with the national economy.
“Some will say that’s a tax increase. Well, it’s a revenue enhancement,” Bosma said during a panel discussion with other legislative leaders this week. “Most Hoosiers realize that we’ve got to fund an infrastructure that’s got a lot of wear and tear on it, and they’re willing to do it, according to those I’ve spoken with and surveyed.”
Finding ways to increase road funding is expected to be a major topic of the legislative session that starts in early January. Rep. Bob Cherry, R-Greenfield, said he expects to see multiple proposals for road funding, and all options should be on the table.
Pence’s proposal isn’t a long-term solution, Cherry said, so the state will consider increasing revenue through raised taxes or other funding options. The state’s cash reserves would cover state government for only 44 days, so drawing from it to support road funding might not be the wisest decision, he said.
A Republican bill also calls for a state study on the possibility of charging tolls on Interstates 65 and 70 across the entire state, which could generate $365 million a year, Republican leaders say.
The gas tax is generating less money every year as less gas is sold because cars are becoming more fuel-efficient, Cherry said; to combat that, the legislature has to find ways to generate more revenue, and that could mean charging tolls on major Indiana interstates.
“We’re going to have to wait and see what all the options are,” he said. “We know we need money for roads, now, we need to find it.”
The Associated Press contributed to this report.
The Indiana General Assembly convenes Jan. 5 in Indianapolis. State lawmakers are expected to address road funding, ISTEP, the state’s teacher shortage and other hot topics this year.