INDIANAPOLIS — Led by state Rep. Ed Soliday, R-Valparaiso, House Republicans on Thursday approved a package of tax hikes, vehicle registration fees and potential highway tolling to fund state and local road improvements over the next two decades.
House Bill 1002, which now goes to the Republican-controlled Senate, was approved 61-36, with no Democrats supporting the proposal and seven Republicans also voting no.
The legislation increases gasoline, diesel and other fuel taxes by 10 cents per gallon, and automatically adjusts the rates for the next seven years, to restore buying power lost to inflation since the tax last was raised in 2003.
It also dedicates all sales tax revenue from gasoline purchases to road construction, creating a $300 million annual state budget hole that House Republicans plan to fill by raising the cigarette tax by $1 per pack.
In addition, all vehicle owners would pay a $15 per year extra registration fee, and electric vehicle owners $150, to support local road improvements.
Finally, the proposal directs the Indiana Department of Transportation to seek federal approval to toll the interstate highways crisscrossing Indiana to ensure those who use the roads the most pay the most for their upkeep.
Soliday insisted the plan is the most fair and effective way to raise the $1.2 billion a year the state annually needs on average for the next 20 years to reach INDOT's goal of having 95 percent of pavement and 98 percent of bridges in fair or better condition.
"That's the number to be what we think we should be — not the best — but what we need to be as the Crossroads of America," Soliday said.
He pointed out that the higher fuel taxes and registration fees should only cost the average Hoosier motorist about $60 more per year, or $5 per month.
House Democratic Leader Scott Pelath, D-Michigan City, said the tax hikes betray those Hoosiers who trusted Republicans not to raise taxes and warned that based on his experiences in the Region that people will really hate paying tolls.
"These dollars...if you're a regular working person are significant," Pelath said. "The tax, at 10 cents, in my humble opinion, is just too big. It's too much."
Democrats also questioned why Indiana is continuing to reduce the corporate income tax rate through 2021 while raising taxes on ordinary Hoosiers.
In a rare move, House Speaker Brian Bosma, R-Indianapolis, left the rostrum to respond to Pelath from the House floor.
"When I ask people would you pay $5 for month for better roads, if it all goes to roads, I have yet to have somebody say no," Bosma said.