The unspeakable “T” word might be heard in the halls of the Indiana Statehouse this winter.
State legislators are starting to utter the word “tax.” And the word that follows it is not their favorite, “cut,” but the dreaded “increase.”
The terrible twosome of “tax increase” is mentioned in the Indiana Chamber of Commerce list of top priorities for the 2017 session of the Legislature.
Why is that important? Because legislators listen carefully to the wishes of the chamber — although they don’t always see eye-to-eye.
It’s also worth noting that legislators don’t have to run for re-election this year, so it’s the safest time to talk about taxes, in hopes that voters have short memories.
In recent years, legislators have steered clear of raising state taxes. Their preferred strategy is to force counties, cities and towns to raise taxes instead, so someone else takes the heat.
But state lawmakers may find no choice this time, because local governments can’t pay for state and federal highways, and that’s the top priority on the chamber’s list.
“Based on studies, reports and simply traveling across the state, it’s pretty apparent that what we desperately need is a long-term, sustainable, transportation infrastructure funding plan,” Indiana Chamber President and CEO Kevin Brinegar said in a news release last week.
Bringer said the state needs to pay for both road maintenance and new projects.
Plus, he said, the Legislature needs to make sure every highway user is paying a fair share.
How to do that? The chamber offered several ideas:
• allow the state’s fuel tax to rise automatically with inflation. It’s been stuck on 18 cents per gallon since 2002.
• simply raise the fuel tax without linking it to inflation.
• charge fees for electric vehicles and other vehicles that don’t use traditional fuel, because right now they’re getting a free ride.
• turn one of Indiana’s free interstate highways into a second toll road, to pay for maintaining it. Fortunately for northeast Indiana, the talk has centered on Interstate 65.
• use all of the sales tax collected on fuel purchases for highways and other infrastructure. Right now, only one cent of the sales tax on each dollar of fuel goes to roads. The other six cents go to the state’s general fund that pays for everything else.
Shifting all of the sales tax on fuel to pay for roads would cause a shortage elsewhere. The chamber says it would support replacing that money with “another revenue source” — which is a code phrase for “tax increase.”
That’s not all. The chamber also is calling for an increase in the tax on cigarettes. But that’s a topic for another day.
It may be hard to find much sympathy for smokers paying more, but almost every Hoosier uses roads.
Do Hoosiers agree with the chamber that better roads are worth a tax increase? Can the legislators find a way to wiggle out of it?
Stay tuned for the next few months, and let us, and your representatives, know what you think.