Indiana Will Soon See Benefits, Costs of Gas-Tax Increase
Lawmakers touted the "historic" road funding plan as the first 20-year, road-funding plan and the largest in the state's history.
"Today the budget is important; it has critical elements in it, but we believe we're going to drive Indiana to the next level with House Bill 1002," House Speaker Brian Bosma said.
The plan to pay for roads relies on gas-tax increases, commercial vehicle cost boost and Bureau of Motor Vehicle fees, and paves the way for tolls in the future. Leaders from both chambers said the road funding plan is a long-term solution; however, they also added that they would have to consider tolling in order to make up enough revenue in the latter part of the 20-year plan.
Holcomb plans to have a draft of a toll road plan by the end of 2018.
At the pumps, residents will see the 10-cents-per-gallon tax increase to 28 cents per gallon come July 1. The diesel tax will climb 10 cents as well, from 16 cents per gallon to 26 cents. Indiana's gas-tax rate will be higher than all of its neighboring states, according to numbers from TaxFoundation.org.
However, Hoosiers may not even notice.
"It really just depends on the timing of it all," said Scot Imus, executive director of the Indiana Petroleum Marketers and Convenience Store Association. "Certainly, 10 cents will be going to the government gallon. That's going to be an impact."
Ball State economist Michael Hicks doesn't think most average people will notice a gas-tax increase and supported the hike.
"Today, the state doesn't really have a choice rather than to raise taxes in order to have enough revenue to finish I-69 or handle congestion around Indianapolis, around Lake County, around Porter County, around Evansville and both Cincinnati and Louisville," Hicks said. "We're struggling to build through the builds we need."
Convenience stores near the borders could experience the most costs of the plan, Imus pointed out, as vehicles aim to fill up outside of the state — especially commercial vehicles.
Typical Hoosiers also can expect more fees at the BMV starting at the beginning of 2018. Lawmakers included a $15 vehicle registration fee on all vehicles and a $150 fee on electric cars.
Lawmakers argued April 27 that Hoosiers would notice the benefits even more so — and soon.
At a news conference, Holcomb said he expects the state Department of Transportation to have a list of projects to prioritize with the new funding by June.
"I can assure you come July, you and all of you, are going to smell asphalt morning, noon and night," Holcomb said.
Holcomb also signed the state's $32 billion two-year budget, which includes a near doubling of pre-kindergarten funds, money for more direct flights, a state police raise and a $200 million funding boost to the Department of Child Services.
