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The Journal Gazette

Monday, March 07, 2016 2:58 pm

House GOP moving away from cigarette, gas tax increases

Niki Kelly|The Journal Gazette

INDIANAPOLIS - Lawmakers appear to be closing in on a road funding solution that provides only one-time monies to aid state highways.

With only three days left in the session, House Republicans seem to be moving away from raising cigarette and gas taxes this year. And Gov. Mike Pence and Senate Republicans never supported that.

Rep. Ed Soliday, R-Valparaiso, said the question on tax increases was always the timing.

"We always knew it was going to be a series of building blocks," he said. "One possibility...is we take an intermediate to long-term approach for locals and a more short-term approach to the state. That is a compromise possibility."

Sen. Luke Kenley, R-Noblesville, said his caucus isn't convinced that a 4 cent increase in the gas tax meets the needs of the state highway department.

He stressed that lawmakers don't want to tell Hoosiers they did something on roads and them come back and ask for more money.

"This is not a complete solution," Kenley said.

Pence said discussions are still underway among the leadership but is "confident we could meet the needs before us to take care of our roads and bridges without raising taxes. I am hopeful we will prevail."

On the state side of the equation, money from the tax increases would have allowed the state to shift money from sales tax on gasoline to roads. But if those are off the table the proposals to aid state funding are slim.

All agree on releasing surplus dollars to Pence later this year for maintenance and preservation. That would likely fall between $400 million and 500 million for fiscal year 2017.

But Pence's proposal to bond was dropped weeks ago. And both sides concede that further study is needed on other options like tolling highways.

A small fee for hybrids and electric cars could bring in about $3 million.

An additional one-time $100 million under discussion is already in state law. The only change would be to allow INDOT to use the money for maintenance instead of new roads.

Both sides appear set on how to help local units, by allowing them more authority to raise wheel and excise taxes locally and returning some local option income tax money they have been holding.

nkelly@jg.net