Gas tax increases are as predictable as fireworks in July • Northwest Indiana Business Magazine
Gas tax increases

Gas tax increases are as predictable as fireworks in July

When fireworks and flags roll around, so do Indiana’s gas tax hikes.

Yet another one-cent increase goes into effect Saturday, part of an inflation-related automatic “adjustment” approved by legislators in 2017.

That means for every gallon of gas Hoosiers will now pay 34 cents in state fuel taxes.

That is 88% higher than the 18 cents it was in 2017 – far outpacing wage growth over the same time of 26%. The consumer price index, meanwhile, has gone up 24% during that time.

Then there are also state sales taxes and federal gas taxes, totaling 72.9 cents in taxes for every gallon.

To be fair, Indiana isn’t leading the nation in gas taxes, but the growth is becoming untenable for Hoosier drivers — especially when it’s hard for us to see whether overall road conditions are actually improving.

I drove Interstate 70 from Indianapolis to Columbus, Ohio recently, and the bumps, dips and roughness were embarrassing, particularly when they stopped exactly at the Ohio state line.

To add insult to injury, lawmakers this session voted to increase gas taxes with absolutely no discussion.

You see, that one-cent maximum annual increase was set to phase out in 2024. Instead of letting that happen, they simply changed the date to 2027.

The language initially covered just one year when it was put in a bill on April 13 via an amendment in the Senate, with no explanation. I haven’t talked to a single senator who understood that was what they voted on.

The language was removed days later in conference committee, only to be inserted into the state budget bill as a three-year extension.

I understand inflation has grown and so has the cost to maintain roads and bridges. But if Hoosiers’ wages aren’t keeping up, something has to give.

Each penny brings in about $30 million annually, meaning legislators approved a $90 million tax increase without even discussing it publicly.

Legislative leaders and Gov. Eric Holcomb said the extension was necessary while lawmakers look for a long-term road funding solution. Also included in the budget was the re-introduction of a task force: “Funding Indiana’s Roads for a Stronger, Safer Tomorrow.”

The 16-member panel is charged with developing a long-term plan for road and bridge needs on the state and local level — along with reviewing the ongoing impact of electric and hybrid vehicles.

It appears everything is on the table, including: public-private partnerships, tolls, user fees, fuel taxes, bonds, registration fees, assessing the reliability of funding sources and implementing appropriate collection points.

A plan and recommendations are due before January 1, which honestly is not a lot of time to solve a road-funding dilemma.

Lawmakers need to be transparent with any future tax increases and sell the plan to Hoosiers, not slip in “adjustments” without discussion. Explain to me how Indiana roads and bridges have specifically improved in the last five years and what the state has left to do.

This story originally was published by the Indiana Capital Chronicle, which is part of States Newsroom, a network of news bureaus supported by grants and a coalition of donors as a 501c(3) public charity. Indiana Capital Chronicle maintains editorial independence. Follow Indiana Capital Chronicle on Facebook and Twitter.


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