Candidate Gregg proposes lifting state's gas tax

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Democratic gubernatorial hopeful John Gregg's first bite of Hoosier populism is likely to run up against some hard economic realism: $540 million is a lot of money to account for.

Gregg rolled out his proposal to eliminate the state's sales tax on gasoline Wednesday, delivering the first detailed policy plan in the governor's race. Standing just down the street from an Indianapolis gas station, Gregg promised the tax cut would save Hoosier drivers between $260 and $520 a year, or $5 to $10 per week.

The money would come from annual performance audits that the Gregg campaign estimates would save the state $650 million a year. He declined to say whether that would mean more budget cuts like those that have come under Gov. Mitch Daniels.

"This is real money going to real Hoosiers," Gregg said Wednesday.

The idea of lifting the 7-percent sales tax on gas is an old chestnut among Indiana Democrats. Former Gov. Frank O'Bannon temporarily suspended the tax in 2000 when gas hit around $2 a gallon. Jill Long Thompson, a 2008 Democratic candidate for governor, called for a ceiling on when the state's sales tax could be levied

The state applies its 7-percent sales tax to the gasoline sales and levies a separate 18-cent-per-gallon charge on gas. The American Petroleum Institute, a Washington-based oil trade group, ranks Indiana's total gas tax burden as sixth highest in the nation.

Republican candidate Mike Pence has talked about cutting the state's corporate and personal income taxes along with the state sales tax, although he has not laid out any specific ideas like Gregg.

"Mike Pence is not opposed to lifting the sales tax on gasoline but he believes that it is no substitute for broad-based tax reform and the kind of energy policies that will reduce prices at the pump for Hoosiers and lessen our dependence on foreign oil," Pence spokesman Matt Lloyd said in a statement Wednesday.

The lack of details or explanation of how proposals would be paid for has become a subtext to the governor's race, something Gregg alluded to in his comments.

"We're going to tell you how it's going to be paid," Gregg said with a subtle jab at Pence. "There's a novel idea."

Gregg also got in a dig on Daniels, by highlighting one of his most embarrassing problems: the $526 million in tax errors that have been discovered in the last four months.

But beyond the political jabs, Gregg faces a few serious problems. The first is the math of Daniels' $526-million blunder.

When taken together, the state's $320-million and $206-million errors make up a $526-million mistake. But the $320 million is money the state didn't know it had, while the $206 million is money it didn't know it owed.

The net effect is only $114 million more in one-time money for the state, much of which was already gobbled up by lawmakers this year to pay for full-day kindergarten and additional money for victims of the state fair stage collapse.

Gregg also faces another challenge in paying for his plan. After eight years of budget cuts from the Daniels administration, he could have trouble finding additional money sitting about in the state budget, said John Ketzenberger, president of the Indiana Fiscal Policy Institute.

"Whether you can find the $640 million suggested from the performance audits is another question," he said. "That's' going to take a big couch to find that much loose change in the state budget."


  • Another Ill founded Idea
    Just another campaign ploy to get folks to vote for him. This is not realistic as our current governing body has just about squeezed all the juice ou to other savings area and how in the world would our street and roads fare if we took it off. the state has nothing to do wiht the price of fuel costs and yes they have a road tax but that goes for our highway and road maintenance and construction to keep our infrastructure up. This state was in the hole with 2 previous Democratic Governors running up deficit spending against our state constitution and now that we are out of the hole with prudent fiscal policies Gregg is advocating more stupidity. Wont work folks. Dont vote for this as it is not possible. If he proposes this where is he going to achieve the same rdevenue wihtout hurting other needs. A Dumb irresponsible promise and without knowledge and substance.
  • There's always Rupert
    This is about as dumb as it gets. On the one hand, folks are encouraged to drive less to reduce pollution (KnoZone action days), but on the other hand, let's encourage even more driving.

    And really? The 3.4% state income tax is just too high?
  • What?
    A democrat talking about cutting taxes? What what?
  • JJ, Joe, Justin
    Harsh words coming from Dumbocrat supporters. Gregg is offering this up to buy votes...in the end if he is elected, there will never be any extra money found in the budget. Our state is better off than most financially, and you dumbocrats still complain...The "MESS" Obama inherited and where it came from.
    This tells the story, why Bush was so bad at the end of his term....

    Don’t just skim over this, read it slowly and let it sink in. If in doubt, check it out.
    The day the democrats took over was not January 22nd 2009, it was actually January 3rd 2007 the day the Democrats took over the House of Representatives and the Senate, at the very start of the 110th Congress.
    The Democrat Party controlled a majority in both chambers for the first time since the end of the 103rd Congress in 1995.
    For those who are listening to the liberals propagating the fallacy that everything is "Bush's Fault", think about this:
    January 3rd, 2007 was the day the Democrats took over the Senate and the Congress. At the time:
    The DOW Jones closed at 12,621.77
    The GDP for the previous quarter was 3.5%
    The Unemployment rate was 4.6%
    George Bush's Economic policies SET A RECORD of 52 STRAIGHT MONTHS of JOB GROWTH
    Remember the day...
    January 3rd, 2007 was the day that Barney Frank took over the House Financial Services Committee and Chris Dodd took over the Senate Banking Committee.
    The economic meltdown that happened 15 months later was in what part of the economy?
    Unemployment... To this CRISIS by (among MANY other things) dumping 5-6 TRILLION Dollars of toxic loans on the economy from YOUR Fannie Mae and Freddie Mac FIASCOES!
    Bush asked Congress 17 TIMES to stop Fannie & Freddie - starting in 2001 because it was financially risky for the US economy.
    And who took the THIRD highest pay-off from Fannie Mae AND Freddie Mac? OBAMA
    And who fought against reform of Fannie and Freddie?
    OBAMA and the Democrat Congress
    So when someone tries to blame Bush...
    Budgets do not come from the White House. They come from Congress and the party that controlled Congress since January 2007 is the Democrat Party.
    Furthermore, the Democrats controlled the budget process for 2008 & 2009 as well as 2010 &2011.
    In that first year, they had to contend with George Bush, which caused them to compromise on spending, when Bush somewhat belatedly got tough on spending increases.
    For 2009 though, Nancy Pelosi & Harry Reid bypassed George Bush entirely, passing continuing resolutions to keep government running until Barack Obama could take office. At that time, they passed a massive omnibus spending bill to complete the 2009 budgets.
    And where was Barack Obama during this time? He was a member of that very Congress that passed all of these massive spending bills, and he signed the omnibus bill as President to complete 2009.
    If the Democrats inherited any deficit, it was the 2007 deficit, the last of the Republican budgets. That deficit was the lowest in five years, and the fourth straight decline in deficit spending. After that, Democrats in Congress took control of spending, and that includes Barack Obama, who voted for the budgets.
    If Obama inherited anything, he inherited it from himself. In a nutshell, what Obama is saying is I inherited a deficit that I voted for and then I voted to expand that deficit four-fold since January 20th.
    There is no way this will be widely publicized, unless each of us sends it on!
  • sad
    This is the same sad political pandering that Jill Long Thompson did four years ago. In that case, it put me over the edge to vote for Daniels. Fortunately for Gregg, he'd probably have to murder someone for me to vote for Pence.
  • psychotic.......
    This country is so in love with the car and gas, that it is willing to slash actual government services on a prgram that is based on finding over $500 Million a year in waste in the state government? Do you understand what he is saying? Indiana will need to throw around $500 M every year so Gregg can take that money and apply it to cover the revenue loss............the worst part about this is Pence still seems like a bigger idiot.
  • Really?
    How dare Gregg think that the people who have suffered under the tutalage of our gov should get a break from the government that claims to have two billion in a rainy day fund. Or, that found 502 million that was a computer glich. Also, Pence I realize that is a complicated question for you. You should never answer anything complicated yourself. I know it is taxing for you to think and talk at the same time. Why, I think you should pray on the idea, ask you wife and family and then try not to answer the question.

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