Indiana House Republicans outlined their plan to fund infrastructure improvements throughout the state Monday. House Speaker Brian Bosma (R-88) announced part of the plan would include an increase in the state’s gas and cigarette taxes.
Bosma said the proposal would help to generate the $1.3 to $1.5 billion needed to fund state and local transportation needs. He said Hoosiers are ready to invest in their roads.
The plan would increase the gas tax by four cents per gallon, seven cents per gallon on diesel, and the cigarette tax by $1. A $100 registration fee for electric vehicles would also be imposed under the plan.
"(The proposal) will increase gas tax for the average Hoosier by about $25," said Bosma. "This is a small price to pay, a user fee to pay, for enhanced roads, enhanced bridges, an economic infrastructure that is very critical to create jobs and maintain jobs so we think this is an appropriate measure."
The plan would redirect more of the sales tax on gasoline to fund infrastructure improvements. A portion of the cigarette tax increase would go toward funding Medicaid expenses. Bosma says that frees up approximately $300 million per year which would be directed to roads and bridges.
Bosma added the proposal would include studying tolling on major highways in the future.
Under the plan, local governments would have the ability to adopt a local option income tax specifically for infrastructure improvements. It also establishes matching grants for local road and bridge projects.
Governor Mike Pence has proposed his 21st Century Crossroads plan which makes $1 billion in road funding available over the next four years without raising taxes. The money would come from existing sales taxes, bond refinancing and state reserves.
House Speaker Brian Bosma (R-88) says the plan is sustainable.