Three months ago, the Indiana Legislature said its top priority for this year would be finding more money for highways.
With the finish line of this year’s session in sight, lawmakers still need to agree on who pays and how much.
They’re looking at an increase in taxes on fuel and possibly tires, higher license plate fees, the possibility of more toll roads and even raising taxes on cigarettes.
The state Senate and House of Representatives have passed different plans, and they have a week to work out their differences.
Both houses favor raising the tax on gasoline by 10 cents per gallon — from 18 to 28 cents.
The House wants to raise it all at once this summer, while senators favor raising it over two years — five cents at a time.
The two houses differ on diesel fuel taxes. The House approved an increase of 10 cents per gallon. Senators voted for a six-cent increase, again phased in over two years.
The plans call for the fuel tax rate to increase by one cent every year to keep up with inflation. Failing to adjust for inflation over the past decade is what put Indiana in a highway-funding shortage.
Both houses call for raising the fees paid when Hoosiers buy their license plates each year — by $15 for most passenger vehicles.
Drivers of cars powered totally by electricity would pay a new $150 fee with annual registrations, to make up for the fact that they don’t pay any fuel taxes. The Senate added a $75 fee for hybrid vehicles that run partly on electricity.
Heavy commercial vehicles would pay an extra $100 for their plates, based on the idea that they cause more wear-and-tear on road surfaces.
House members want to use all sales tax paid on vehicle fuels for highway funding. Right now, most of that tax goes for other purposes. Senators did not approve that change.
To make up for shifting the fuel sales tax to roads, House members propose a $1-per-pack increase in the tax on cigarettes. Senators disagreed. Instead, they voted for a new, $5 tax on the purchase of each new tire.
Both houses seem to agree that the governor should be free to establish tolls on the state’s free interstate highways.
At the start of this process three months ago, legislators said they wanted a “pay for what you use” system.
Gasoline taxes meet the fairness standard. Taxes on diesel fuel for heavy trucks pose a trickier issue. If the rate gets too high, cross-country truckers can simply avoid filling up in Indiana.
Big trucks cause most of the damage to our roads. Trucking is a big business in Indiana, however, and we don’t want high taxes and registration fees to push it out.
Boosting the fee for passenger-vehicle license plates by $15 does not meet the lawmakers’ fairness standard. It would fall equally on a commuter who travels 20,000 miles a year and the proverbial little old lady who drives to church and the grocery store.
A higher registration fee does seem to be the only way to get drivers of electric and hybrid cars to pay a fair share.
A tire tax also seems to be fair, since it relates to miles driven. We’d hate to see Hoosiers driving their tires until they’re bald to avoid the tax, but $5 isn’t much compared to the price of a new tire.
We worry that tolls on interstates will push more drivers to choose overcrowded secondary roads to avoid paying tolls.