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Road-funding plan faces pushback over tax hikes in Senate hearing

March 14, 2017

A road-funding plan that includes a number of tax and fee increases to pay for infrastructure improvements in Indiana faced pushback from conservatives in a hearing Tuesday.

Representatives from groups including the Indiana Family Institute and Americans for Prosperity told lawmakers on a legislative panel that the solution to the state's funding needs for roads and bridges should not be raising gasoline taxes. To do so would risk tarnishing Indiana's low-tax brand, they argued.

"The policies that conservatives say we believe in—we say lower taxes broaden the base, increase revenue—those things have happened here in Indiana," said Justin Stevens, the state director for Americans for Prosperity. He said Indiana would take a step backward if the bill passed, as is.

The proposal from state Rep. Ed Soliday, which the House approved, would increase gas taxes by at least 10 cents per gallon, create a $15 vehicle registration fee and allow the state to seek federal authority to impose roadway tolling, among other things.

Gov. Eric Holcomb, a Republican, has said repeatedly he wants a long-term, sustainable plan that addresses funding needs to be passed this session.

Most lawmakers agree that the state needs to spend more money on its aging infrastructure, but the specifics of the plan are up for debate. Conservatives who testified Tuesday likely hope to sway some Republican members of the Senate, who have been less receptive to tax increases.

A proposal last year that would have raised taxes for cigarettes and gasoline died after GOP senators and then-Gov. Mike Pence rejected the increase.

Should a plan with tax hikes pass this year, Al Parsons of the Coalition of Central Indiana Tea Parties warned, senators could face electoral consequences.

"The pendulum always swings," he said. "I will work to see it swing back, as will others who will be disappointed with this tax increase."

The legislative panel that heard testimony Tuesday is expected to consider amendments on the bill and vote on sending it to the full Senate at a later meeting.

Sen. Brandt Hershman, who chairs the Senate Tax and Fiscal Policy committee, said his panel will have a variety of funding mechanisms to consider in Soliday's bill.

"He's given us a menu to work from," the Lafayette Republican said, adding that lawmakers will see what makes the most sense for the state economy and taxpayers.

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