Indiana House Speaker Brian Bosma said Thursday that it is "politically in everyone's best interest" for lawmakers to embrace his long-term proposal to fix Indiana's roads, a move that would force Gov. Mike Pence to go against his word by raising taxes.
The condition of Indiana's roads has emerged as a major issue not only for lawmakers, but also on the campaign trail. However, a major division exists among majority Republicans over how to fund the fixes, with Pence and the Senate leaders signaling they are at odds with the House, which would like to increase the cigarette tax by $1 a pack while allowing the gas tax to increase with inflation.
The gas tax has not been increased in more than a decade, but Pence, who is facing a tough re-election, has frequently touted the fact that his own road-funding plan would not raise taxes—a statement he has reiterated in email blasts to campaign donors. Instead, he proposed borrowing $240 million while drawing $241million from the state's budget reserves to boost short-term road spending in 2017.
That would not address the long-term needs of the state, which has seen gas-tax collections plummet as people have shifted to more fuel-efficient cars and gasoline prices have fallen. And Bosma said he was "serious" about acting now rather than later.
"Somebody's liable to make a campaign pledge during campaign season that they will never raise taxes," Bosma said. "It's happened before, it will happen again."
House Roads and Transportation committee Chairman Ed Soliday said action needs to be taken soon because increased fuel-efficiency standards going into effect at the end of the decade will cause gas-tax collections to "fall off like a rock."
The plan has yet to be formally proposed to lawmakers, but Soliday and Bosma provided a broad sketch of how it would work. And they have previously indicated that they are less-than-enthused about the prospect of borrowing money, which Pence's plan calls for.
In addition to increasing cigarette and gas taxes, the House plan would rededicate a portion of the gas tax that currently funds other priorities. Sales tax collected on top of gas sales mostly goes toward the state's general fund, but under the House plan it would be rededicated to road funding, Bosma said.
"Twenty-two states have adjusted tax structure to take care of their infrastructure problems," Soliday said. "The governor's plan seemed to be somewhat short-term."
Senate President Pro Tem David Long declined on Wednesday to comment on specifics of the House plan because it had not been formally released.
Multiple studies conducted by the state have found that a new way of paying for roads and infrastructure is needed just to keep up with maintenance.
"You're talking to a guy who has championed 19 successful tax cuts in 20 years, so it is not without a lot of forethought that we are now talking about a dedicated revenue increase for dedicated purpose," Bosma said.