Indiana House and Senate Republicans are touting a 20-year road funding deal that raises gas taxes, shifts the sales tax on gasoline on roads over the nest six years and provides hundreds of millions for local projects.
House Bill 1002 will provide nearly $900 million in new annual funding for state roads and bridges by 2024, and local communities will see an average of $300 million in new road and bridge funding each year. Overall, the plan is expected to generate $1.2 billion in new annual revenue for state and local roads and bridges beginning in 2024.
The plan increases user fees by 10 cents per gallon on gasoline, special fuel and motor carrier surcharge taxes to restore buying power lost to inflation. These fees would be indexed annually for the next seven years, but wouldn’t increase more than 1 cent per year. The gasoline tax has not been increased since 2003 and the other fees haven’t been increased since 1988.
Under the plan, the remaining 4.5 cents of the sales tax on gasoline would be shifted over five years starting in 2020 from the state’s general fund to the State Highway Fund, which is dedicated solely to roads and bridges.
The measure calls for a new $15 annual fee on all vehicles, a $150 annual fee on electric vehicles and $50 for hybrids registered in Indiana. The money would provide a sustainable source of funding for Indiana’s Community Crossings Matching Grant Fund, which provides road funding to local governments. Bosma said important changes were also made to expand grant eligibility to help smaller cities, towns and counties fund local infrastructure.
Under the proposal, the Indiana Department of Transportation would study tolling and submit a waiver to the federal government that would allow Indiana’s executive branch and the State Budget Committee to approve tolling projects.
A conference committee report will be released later today, and the House and Senate will vote on the proposal on Friday. If the measure passes both chambers, it will move on to the governor for final consideration.
You can hear House Speaker Brian Bosma and Senate President Pro Tempore David Long, as well as State Senator Luke Kenley by clicking here in the Leon-Tailored Audio.