Proposed gas tax hike sparks more debate

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Published: Wednesday, 15 March 2017 20:33

INDIANAPOLIS – When gas prices are down, cars snake around the block. When they’re up, they make their way from town to town just to save a few pennies.

Indiana currently ranks in the middle of the pack in state gas prices nationally.

But Scot Imus, executive director for the Indiana Petroleum Marketers and Convenience Store Association, said Indiana would jump to the fifth highest if Indiana adopts proposed road funding legislation that raises the gas tax at the pump.

Imus said raising Indiana’s gas tax puts the state at a competitive disadvantage and is not equitable for retailers or drivers. Especially when it comes to a higher increase in diesel fuel tax, Imus said truckers will easily bypass Indiana as a place to fuel.

The road funding bill, if passed, would increase this fuel price to $2.13. The gas tax is one of several components proposed to provide long-term funding for Indiana road maintence and construction. Photo by Ashley Shuler, TheStatehouseFile.com

“My colleagues in neighboring states are jumping with joy,” he said.

Imus’ testimony was one of many polarizing opinions the Tax and Fiscal Policy Committee heard over the House Republican’s $1.2 billion road funding plan Tuesday.

The road funding bill, House Bill 1002, calls for Hoosiers to pay an additional 10 cents per gallon in gas taxes, $15 more to register vehicles and a new $150 fee for electric-powered vehicles.

The bill would also give the governor permission to install toll roads without a vote by the legislature.

Chris Kiefer, Indiana Department of Transportation chief of staff, said Indiana’s infrastructure is in need of more money to repair and replace aging roads and bridges, most of which were built during the interstate era 50 years ago.

He said although INDOT estimates long-term maintenance costs for projects, proper maintenance of existing structures and new construction calls for more incoming money.

Rep. Ed Soliday, R-Valparaiso, who authored the bill, said the gas tax is being raised to give INDOT some of that money—and to make up for the drop in funds Indiana has been getting from drivers due to inflation and increased fuel efficiency in cars over the years.

Justin Stevens, state director for the Indiana chapter of Americans for Prosperity, said Indiana’s conservative policies and series of tax decreases have led to economic growth. But Stevens argues HB 1002 takes Indiana a step back by making one of the largest tax increases in history.

He proposed, instead, that legislators allot 100 percent of the existing gas tax revenue to roads to maintain them. Currently, only 15 percent of the current gas tax revenue goes to roads.

“We should be able to work with what we currently have,” he said.

Dennis Faulkenberg from the Build Indiana Council said legislators are fooling themselves if they think they can squeeze the money INDOT needs from the existing gas tax. He said Steven’s suggestion of transferring money won’t work.

“We need to own up to the reality that it needs to be new, long-term revenue to the state,” he said.

Mark Lawrence from the Indiana Chamber of Commerce supported the bill, saying long-term infrastructure improvements are vital to supporting commerce and will actually hurt, not harm, Indiana businesses and consumers.

Before making it to Senate committee, the bill passed the full House with a 61-36 vote in February. On the House floor, it got no support from Democrats, who said it will create a tax burden for low-income Hoosier families.

The bill will remain in committee and be discussed next week.

Article writer Ashley Shuler is a reporter for TheStatehouseFile.com, a news website powered by Franklin College journalism students.