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House Committee Caps Increases In Gas Tax Bill

Posted On January 26, 2017

By Mike Perleberg

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(Indianapolis, Ind.) – Indiana lawmakers are capping the potential increase in the state gas tax as they look for a long-term solution to road and bridge funding.

House Bill 1002 is House Republicans’ plan to produce revenue for new infrastructure and maintaining the state’s existing roads and bridges. It seeks to raise the state gasoline tax by 10-center per gallon, as well as adding a $15 transportation infrastructure improvement fee to all vehicles registered through the Indiana Bureau of Motor Vehicles starting July 1. Electric vehicles would also be subject to a new $150 registration fee. Additionally, the bill would require a study to be done on tolling some highways.

Members of the House Roads and Transportation Committee did vote 8-5 to make one change to the bill and pass it on Wednesday. State Rep Randy Frye (R-Greensburg), a member of the committee, was among those voting in favor.

Originally the plan was to tie future annual increases to gas tax to inflation. The bill was modified to cap those increases to just a penny each year.

Some Republican lawmakers had been opposed to the bill being tied to the inflation rate.

After Wednesday’s vote, HB 1002 will move to the House Ways and Means Committee.

Republicans are being careful to call the gas tax a user fee increase, but Democrats are asserting that it is a tax increase on Hoosiers. Lawmakers say the higher gas tax, which has not been increased since 2003, would cost the average Indiana motorist about $4 more per month at the pump.

If the bill becomes law, the new taxes and registration fees are projected to raise $1.2 billion each year to build and maintain roads.

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