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GREENFIELD — The fees you pay to register your car could increase under a new law that aims to garner funding for local road repair.
Last week, state lawmakers passed a bill that takes several steps to generate more money for road improvements, part of a statewide effort to address Indiana’s crumbling infrastructure.
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The bill allows counties to double the excise surtax they collect when residents register their vehicles from $25 to $50. The law also allows municipalities with populations greater than 10,000 — in Hancock County, only Greenfield would qualify — to impose their own taxes, which had previously been an option for counties only.
In addition, the law returns $9 million to Hancock County coffers, money that had been previously collected from local income taxes and set aside by the state for emergencies. Seventy-five percent of that funding is now earmarked for road work under the new law.
Local officials say they’re happy the state has returned the county’s local income tax reserves, and they’re eager to see how much road work the funding will support. But some are reluctant to hike registration taxes.
County council president Bill Bolander said he’s generally disappointed in the bill. The local income taxes previously held by the state belong to the county, and while he’s happy that money will now go toward roads, he thinks lawmakers should not have dictated how the money will be spent.
Also, he doesn’t support an increase in local vehicle registration taxes. He favored a gas tax increase instead, which would lead to those who drive the most footing the bill for road repairs.
From the start of this session, Gov. Mike Pence and Republican Senate leaders were opposed to any statewide tax increases. A bill that would have increased the gas tax by about 4 cents while increasing the state’s cigarette tax by $1 passed the House. But those statewide tax increases were stripped from the bill when it was passed in the Senate.
Bolander said instead of choosing to raise the gas tax — which needs to be increased as cars become more fuel efficient — lawmakers shifted their responsibilities to local officials, leaving them to hike taxes.
“They’d rather us be the bad guys,” he said.
In Greenfield, city leaders are applauding the legislation, saying it will provide Greenfield with desperately needed road funding.
Mayor Chuck Fewell estimates the disbursement the city receives from local income tax reserves at $2 million. Street commissioner Tyler Rankins is already calculating how much road work can be completed with the additional funding, he said.
Whether the city will enforce higher registration taxes in addition is still up for debate.
“It’s a question we’ll have to ask ourselves,” Fewell said. “It’s a new tool we’ll have to survey to decide whether it’s in the best interest of the city to raise those taxes.”
But Fewell welcomes another tool to fund street improvements, noting the funding Greenfield receives from the state now is enough to fix just one mile of Greenfield’s 105 miles of road.
“Anything we can get, we are excited about,” he said. “We need it.”
The road funding plan — which is expected to be signed into law by Gov. Mike Pence — is just the start of conversations about how to address Indiana’s roads. Lawmakers say they expect to revisit the issue in 2017, when tax increases will be back on the table.
House Speaker Brian Bosma, who represents western Hancock County, said in a news release the bill establishes a tax force to identify road funding plans this summer.
“We reached a compromise on road funding, which addresses our state’s immediate road funding needs while ensuring legislators come back next year to discuss a more comprehensive, long-term plan,” Bosma said.
Local lawmakers approved legislation that will pump $230 million into state highways and bridges, while providing counties with about $585 million for road work.