INDIANAPOLIS — The House Republican road funding plan that increases fuel taxes, vehicle registration fees and opens the door to widespread highway tolling is on the move.
By an 8-5 margin, the House Roads and Transportation Committee voted Wednesday to approve House Bill 1002, sponsored by state Rep. Ed Soliday, R-Valparaiso, and send it to the Ways and Means Committee for further review of its financial impact.
Under the plan, the state's gasoline tax would increase on July 1 by 10 cents — totaling 28 cents per gallon — to restore the buying power lost to inflation since the tax last was raised in 2003.
Similarly, the state tax on diesel and other motor vehicle fuels would go up 10 cents per gallon, and all fuel taxes automatically would annually adjust by up to 1 cent per gallon based on inflation and Indiana personal income changes.
In addition, all revenue from the state's 7 percent sales tax on gasoline, one-seventh of which currently is allocated for roads, would be used entirely for infrastructure starting in 2021.
Motorists also would pay an extra $15 registration fee on every vehicle with an Indiana license plate to support local road projects on top of the 47 percent share of state fuel tax revenue that currently goes to local governments for roads.
Owners of electric-powered vehicles would be charged $150 a year since they don't pay the gasoline tax.
Soliday said if his plan is enacted the average Hoosier driver would pay about $60 more in fuel taxes and registration fees each year, or $5 per month.
It also would get the state closer to a user-pays road funding system which he said is needed since so many cars and trucks on Indiana highways originate in other states.
According to INDOT, Indiana needs to annually raise an average of $1.2 billion more over the next 20 years for the agency to meet its goal of having 95 percent of pavement and 98 percent of bridges in fair or better condition.
Currently, 89 percent of pavement and 94 percent of bridges are rated fair or better, but INDOT expects those numbers to decline significantly absent additional funding as most interstate bridges soon will reach the end of their projected 75-year life spans.
"Somebody has to pay. There is no free lunch here," Soliday said. "All we're saying is if you use the roads, pay for what you use."
Soliday's proposal was supported in committee by the Indiana Chamber of Commerce, labor unions, trucking and agriculture industry leaders, state and local economic development groups and many county and municipal officials, including Democratic Gary Mayor Karen Freeman-Wilson.
Speaking in opposition were several conservative anti-tax organizations, including Americans for Prosperity of Indiana, whose executive director, Justin Stevens, said lawmakers should prioritize existing state revenue for roads by freezing all other spending before seeking a tax increase.
Soliday said that's an unrealistic strategy to save Hoosiers $5 per month since it would harm educators and students the most, as funding for elementary schools, high schools and universities together comprise about two-thirds of state general fund spending.
State Rep. Mara Candelaria Reardon, D-Munster, who voted against the proposal, expressed concern about it giving the governor the power to decide which roads would be tolled and when.
Soliday suggested there will be plenty of time for that debate since the soonest any new tolling could start is well into the next decade.
Republican Gov. Eric Holcomb has said he opposes tolling existing roads.