Details of Indiana road-funding agreement begin to emerge

April 20, 2017

Indiana lawmakers plan to release a broad outline Thursday afternoon of an agreement to raise taxes in order to fund road projects.

Majority Republicans generally agree on raising the state's per-gallon fuel taxes by at least 10 cents and charging new tire and vehicle registration fees. They hope it will raise about $1.2 billion in new revenues annually.

But the sticking points have been House proposals to raise cigarette taxes by $1 a pack and shift all sales tax revenues also charged on fuel purchases toward infrastructure funding.

Much of the fuel sales tax currently goes toward funding other programs, and House Republicans had sought the cigarette tax increase to backfill the money that would be stripped away in favor of infrastructure spending.

House Speaker Brian Bosma said the cigarette tax is dead due to overwhelmingly opposition in the Senate. But he said the Senate has agreed to slowly shift all of the sales tax revenues collected on fuel purchases over to roads by 2025.

"We have felt, from the outset, that Hoosiers believe that everything they pay at the pump is going to roads and we should make it so. And that's what we're accomplishing with the bill," Bosma said Thursday morning.

At least some of that money will be placed in a special fund so that it can be reallocated, should an emergency crop up, Bosma said.

Lawmakers started the session calling for a "long term" road-funding plan. But the deal they reached only gets them part of the way there and doesn't address all of the state's transportation funding needs, which are estimated at $2 billion in new revenue a year.

Republican leaders, including Gov. Eric Holcomb, say that means the state will have to consider interstate tolling in the not-too-distant future.

A provision in the bill would allow the governor to seek federal authority to toll. But Holcomb has signaled that he isn't itching to do that quite yet.

Last month, he suggested that was something the state should consider in seven or eight years.

House and Senate leaders plan to discuss the deal they reached at a news conference on Thursday afternoon.


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