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GOP Road Funding Proposal Would Increase Certain Taxes

Mike Bitzenhofer

House Speaker Brian Bosma (R-Indianapolis) Monday laid out his caucus’ plan for road funding, which includes a pair of tax increases. 

Part of the House GOP's plan is a gas tax increase of four cents per gallon that Bosma says amounts to 25 dollars a year for the average Hoosier driver.

Both Bosma and Ways and Means Chair Tim Brown (R-Crawfordsville) emphasize that they remain staunchly anti-tax. But Bosma says the economic growth benefits of their plan demand an exception.

"I'm not pro-tax," he says. "I am, however, pro-growth, and this is an economic investment for our state's future without mortgaging our future or our kids."

The proposal also shifts more money from the state’s sales tax on gasoline into road funding. It covers that shift with a $1.00 increase in the cigarette tax, which would be used to help fund Medicaid. 

Bosma says the state needs a permanent funding source for more than $1 billion  in annual maintenance needs.

“The needs for long-term, a growth in Indiana both at the state and local level, are someplace between $1.3-billion and $1.5-billion annually,” Bosma says. “It’s not one time, it’s not over the next four years, that’s annually.”

Bosma argues the taxes in the House plan are the right kind of tax hike, because they're essentially user fees, with smokers financing health costs and motorists paying for the roads they drive on.

Bosma says the plan would generate between $350 and $400 million a year.

House Democratic Leader Scott Pelath (D-Michigan City) says in a statement that while it's good to see lawmakers wanting to fix Indiana's roads, the House GOP plan unnecessarily takes money from taxpayers while billions remain in state reserves.

The plan would also create a dollar-for-dollar matching grant program for local communities.   

Brown notes the state would have to develop a reliable measure for how much locals need before that money goes out. "Some counties, some locals have an understanding of what their assets, or roads and bridges, what condition they're in," Brown says. "But it's not consistent, and it's not uniform across the state."

In order to help generate local money for the grant program, the House Republican proposal provides them with new and expanded tax options, including new local income taxes dedicated for roads and bridges and new wheel and excise taxes for municipalities with at least 20,000 people.

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