While Mayor Joe Hogsett weighs whether to sign or veto Proposal 192, the wheel tax measure the City-County Council passed Monday night on a 14-10 vote — three shy of a veto-proof majority — Indianapolis is only the largest of dozens of Indiana communities confronting the same decision this year.
The wave traces to two bills from the 2025 legislative session. House Enrolled Act 1461 tied full eligibility for the state’s Community Crossings matching grant program to whether a community has adopted a wheel tax and vehicle excise surtax; local units without the taxes are now limited in how much of the program’s road funding they can access. The same session, Senate Enrolled Act 1 cut property taxes statewide, reducing revenue for local governments in all 92 counties.
Gov. Mike Braun made the state’s expectation explicit at a mayors’ conference in Elkhart, telling local officials, “Wheel taxes are going to be something you’re going to need to use,” and warning that the state would have difficulty partnering with communities that declined.
Local officials across the state have responded. Evansville, long one of the few major Indiana cities without a wheel tax, adopted one. Greenwood passed municipal wheel and excise taxes at the same rates Johnson County already charged — a move that, under the law’s “unstacking” provision, redirects an estimated $1.9 million a year from the county’s tax to the city, according to city figures. Floyd County adopted a $30 fee, Madison County $25, and Franklin County went to the statutory maximum. Wayne and DeKalb counties adopted the minimum. Harrison County set its fee at $5 — the floor — with officials citing concern that trucking companies would re-register fleets in neighboring counties without the tax. Plymouth, Bluffton, Decatur and Goshen have also adopted the taxes, while Richmond, Tell City, East Chicago, Marshall County and Henry County are still deliberating. Bartholomew County has delayed its decision until 2027.
Not every adoption has stuck. New Whiteland passed its taxes in the spring to preserve grant eligibility, and its council is now discussing repealing them before they take effect; one councilman there described the state’s approach as a “shell game.” Knox County officials are considering phasing out their existing wheel tax by 2029.
Marion County’s situation differs from the rest of the state in one significant respect. While other communities need only adopt the taxes to preserve Community Crossings eligibility, Indianapolis must produce a local match — starting at $50 million in 2027 and rising to $100 million by 2031 — to receive an additional $50 million annually in state road funding under the law as amended this year. According to the ordinance’s recitals, the match must come solely from a new revenue source, and if the city misses the match in any year, it becomes permanently ineligible for the state funds.
That provision is central to the dispute between the proposal’s supporters and opponents. Critics of the tax, including all six council Republicans and four Democrats who voted no, have argued the city should fund roads by reallocating existing dollars. Supporters counter that the statute forecloses that option. Councilor Jared Evans said during earlier debate that legislative leadership had made clear the state did not want Indianapolis using current revenues to satisfy the match. The Hogsett administration has maintained the match can be met without a tax increase, relying on existing budget allocations, stormwater fees and supplemental income tax distributions — an interpretation council leaders dispute and one the state comptroller’s office, which must certify the city’s funding source by Dec. 31, has not publicly addressed.
Hogsett has until mid-July to act on the proposal. A veto would return the measure to a council that passed it three votes short of an override.
