Senate changes the combination of taxes in road funding plan

By Andi TenBarge
TheStatehouseFile.com

INDIANAPOLIS — A road funding plan that would cost drivers more money at the pump and could add tolls to Indiana roadways moves forward in the Senate with a new combination of tax increases.

The House Republican plan included a 10-cent increase on both diesel and gas taxes. However, the Senate Tax and Fiscal Policy Committee voted to amend House Bill 1002 to phase in the gas tax increase over two years. The amendment also decreased in the total diesel tax increase to six cents that would also be phased in over two years.

Indiana is seeing a drop in revenue from drivers due to inflation and increased fuel efficiency in cars over the years. The bill’s author, Rep. Ed Soliday, R-Valparaiso, said the taxes increases give INDOT money to make up for the lost funding.

“Our budget is lean and taxpayer-friendly. Because of this, we cannot just make cuts elsewhere to fund this need,” Hershman said in a statement. “Our plan will spread the responsibility of paying for roads among all drivers using our roads, including heavy trucks, which put significant wear and tear on our infrastructure.”

The House version required the entire revenue gained from sales tax on gasoline sales to go to road funding, but the Senate committee removed the provision Tuesday.

That change could eliminate the need $1 increase in the cigarette tax currently in House Bill 1001, the budget. The cigarette tax hike was intended to fill the gap created by the sales tax shift.  

Committee chairman Sen. Brandt Hershman, R-Buck Creek, said both of those issues belong in budget discussions in the Appropriations Committee, rather than road funding.

“We are not contemplating a tobacco tax increase at this time — not in this bill,” Hershman said. “And so we’ve left that discussion for a budget discussion.”

Senate leaders are proposing to add a $5 tire fee and $100 commercial license plate fee. The Senate changes would also allow, but not require, INDOT to seek a federal waiver to toll all interstates in Indiana. Hershman said this change would place fewer restrictions on what roads INDOT would be allowed to toll.

Sen. Karen Tallian, D-Portage, said she had reservations about the plan and how it would affect Hoosier drivers, but decided to vote in favor of the Senate proposed version.

“I also believe we have a huge infrastructure need in this state and my constituents are telling me to support this despite a tax increase,” Tallian said.

Sen. Mark Stoops, D-Bloomington, said he decided to vote against the bill “for now” because he wanted to review the Senate changes properly.

The committee voted to 11-2 to move the bill to the full Senate for more discussion.

Andi TenBarge is a reporter for TheStatehouseFile.com, a news site powered by Franklin College students.

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