Tax Increase May Be Needed To Fund Ind. Infrastructure Plans

Posted On December 15, 2016

By Mike Perleberg


(Indianapolis, Ind.) – While legislative leaders are calling for increased infrastructure funding, the chief budget-writer in the Indiana Senate says the state doesn’t have the money.

Unless there is a tax increase.

State Senator Luke Kenley (R-Noblesville) told the Associated Press Wednesday that Indiana does not have enough money to keep up maintenance of its existing roads and bridges, let alone undertake new projects. He suggested increasing the state’s gasoline tax or charging tolls on state highways as two possibilities for bringing in more revenue.

House Speaker Brian Bosma (R-Indianapolis) and Senate President Pro Tem David Long (R-Fort Wayne) have been on record saying that some tax increase may be necessary. Bosma has backed upping the gas, excise, or cigarette tax.

Southeast Indiana legislators acknowledge revenue’s importance in the equation of improving roads.

“We have some challenges ahead of us in figuring out the funding mechanisms for that,” State Senator Chip Perfect (R-Lawrenceburg) said earlier this month.

Like legislators, Indiana lieutenant governor and governor-elect Eric Holcomb has been propping up infrastructure as a major priority for the 2017 budget session. Making his first major address since his election on Wednesday, Holcomb was coy about how he would like to see the state fund what he calls a sustainable, long-term infrastructure plan. He said specific ideas would come in January.

During the 2016 legislative session, lawmakers passed a temporary solution to road funding, directing more than $1 billion to state and local roads in 2016 and 2017. The funding came from local option income tax reserves, redirecting a portion of the state gas tax.


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