Road funding plan that increases gas, cigarette taxes clears first hurdle

GREENFIELD — Relief from pothole-plagued highways could be on its way — but it’s going to cost you.

This week, an Indiana House committee took the first step toward approving a bill that would raise the state’s gasoline and cigarette taxes to generate funding for road repairs. It’s a measure House GOP leaders say is necessary to create long-term funding solutions for improving Indiana’s dilapidated highways and interstates.

House Bill 1001 passed a House transportation committee this week on an 8-5 vote, with Democrats on the committee as well as one GOP member voting against it.

The measure, backed by Rep. Ed Soliday, R-Valparaiso, offers a sustainable solution to a problem many states across the U.S. are grappling with, Soliday said.

The bill would increase Indiana’s cigarette tax by $1 and add 4 cents to the state’s 18-cent gasoline tax.

It would also redirect a portion of the state’s gasoline tax that lawmakers currently spend on other priorities back to infrastructure projects. And it would give cities and towns with a population greater than 20,000 the authority to raise their own vehicle registration taxes to help pay for local improvements.

“What we’re asking (for) is enough money in this bill … to stop the decline of Indiana roads,” Soliday said.

The bill contrasts what Gov. Mike Pence has called for; he has said he doesn’t want taxes to increase to fund roads in 2017.

Instead, he’s calling for a combination of borrowing and drawing down state budget reserves to pump about $480 million into highway projects in 2017.

The condition of Indiana’s roads has emerged as a major issue not only for lawmakers but also on the campaign trail.

But there is a major division among majority Republicans over how to go about making improvements, with Gov. Mike Pence and the Senate leaders signaling they are at odds with the House.

“I think when you have money in the bank, and you’ve got the best credit rating in America, the last place you should look to pay for roads and bridges is the wallets and the pocketbooks of hardworking Hoosiers,” Pence said during his recent State of the State address.

Soliday justified an increase by noting the gas tax has not been increased in more than a decade. His plan would also allow for future increases that keep pace with inflation.

Soliday made the case for increasing cigarette taxes, noting the state spends about $590 million a year on smoking related illnesses.

“It is fair for folks who have chosen to take the risk to pay the cost of that risk,” Soliday said.

Some local residents, however, said they’d rather not see the state increase taxes.

Brian Bentley of Greenfield said he prefers Pence’s proposal. If the state borrows the money it needs to pay for road funding, it likely won’t cost him as much as the tax increases that have been proposed, he said.

The state government already wastes a considerable amount of money funding programs it shouldn’t and it has a money surplus, he said.

“We already pay enough in taxes. We shouldn’t have to pay more,” Bentley said.

The Associated Press contributed to this report.

Samm Quinn is a reporter at the Greenfield Daily Reporter. She can be reached at 317-477-3275 or