Gas Tax Increase, Road Funding Bill Passes Indiana House Despite Reservations

Feb 3, 2016

Indiana legislators are split on whether to increase fuel taxes to fund road improvements.
Credit Brian Herzog /

After a lengthy debate Tuesday, the Indiana House of Representatives approved a road funding bill, something lawmakers from both political parties identified as a top priority in the 2016 General Assembly.

But legislators are split on how to pay for road improvements, and the measure passed on a vote of 61 to 36, with several Republicans joining Democrats in voting no. 

The House Republican bill pays for road maintenance by increasing the gas tax four cents a gallon and shifting all sales taxes on fuel to roads. 

Most of the gas sales tax currently goes to the state’s general fund, so to cover the gap, the bill would raise the cigarette tax $1.

Democrats oppose the tax hikes. Representative Dan Forestal (D-Indianapolis) says, if Republicans hadn’t spent the last several years reducing taxes, including the corporate tax rate, they could find road funding sources elsewhere.

“It’s going to be very difficult to explain to your constituents why their taxes are going up to fund these roads,” he says.

While defending previous tax cuts, GOP Representatives such as Matt Lehman (R-Berne) say modest tax increases are sometimes necessary.

“Indiana’s the crossroads of America,” he says. “Our economy is growing in Indiana and our infrastructure to move those products is crumbling.  It is time for us to lead and get our roads back in shape.”

The bill moves to the Senate for consideration.