INDIANAPOLIS — It now appears all but certain that the Republican-controlled General Assembly this year will increase fuel taxes, boost vehicle fees and authorize tolls on Hoosier motorists to pay for road improvements.
On Tuesday, the Senate Tax and Fiscal Policy Committee changed the mix of taxes and fees in House Bill 1002, sponsored by state Rep. Ed Soliday, R-Valparaiso. But the committee still overwhelmingly agreed, 11-2, to advance the tax-hike proposal to the 50-member chamber.
The revised legislation maintains the 10 cents per gallon gasoline tax increase approved by the House, including the up to 1-cent annual inflation adjustment for the next seven years.
Though just half the increase, or 5 cents per gallon, would take effect July 1. Consumers would begin paying the second half at the pump one year later.
Similarly, the tax increase on diesel fuel would be phased in over two years, but only would total 6 cents per gallon instead of the 10 cents sought by the House.
The Senate committee removed a House mandate that all revenue from the state's 7 percent sales tax on gasoline purchases be spent only on roads.
That likely means the $1 per pack cigarette tax hike, intended to cover the approximately $300 million a year General Fund revenue loss caused by dedicating gasoline sales tax revenue to roads, will be deleted from House Bill 1001.
Under the Senate plan, Hoosiers still would pay an extra $15 a year when registering their vehicles to support local road projects, with electric vehicle owners charged $150 since they don't purchase gasoline.
The committee tacked on an annual $75 additional fee for hybrid owners, since their cars and trucks are optimized to use less gas than other vehicles. It also approved a $5 fee on every tire purchased in Indiana.
In addition, the legislation continues to empower the governor to seek federal approval to toll the state's Interstate highways, and now gives him the authority to unilaterally decide which routes will be tolled and at what rates, if the state is given permission to toll.
"We have taken input from a very wide variety of stakeholders here and are trying to craft something that is in the best interest of all Hoosiers over the long term," said state Sen. Brandt Hershman, R-Buck Creek, the committee chairman.
Soliday was effectively powerless Tuesday to prevent changes to his proposal. He acknowledged after seeing the panel's revisions, "There's a lot of things in there that we can work together on going forward."
The full Senate is likely next week to consider additional amendments before voting on the legislation.
If approved, it then will go to a House-Senate conference committee for representatives and senators to work out a compromise final version that again must be passed by both chambers to advance to Republican Gov. Eric Holcomb for his signature or veto.