Construction issues prompt support for gas tax hike

INDIANAPOLIS -- Not long ago, Indiana's rising fuel prices prompted Gov. Frank O'Bannon to suspend the state's sales tax on gasoline.\nBut construction costs and a growing backlog of road projects are now giving some House Democrats reason to support a bill that would raise the tax by 3 cents a gallon.\nDemocrats say the bill is designed to help local governments pay for better roads and bridges, although they acknowledge promoting a tax increase will be an uphill battle.\n"We'll see if people are willing to bite the bullet on that dreaded three-letter word, T-A-X," said Rep. Sue Crosby, D-Roachdale, who wrote the legislation.\nThe bill also would reallocate the gasoline tax to fund only transportation projects. It now goes toward overall state programs.\nCrosby took the proposal before the House Roads and Transportation Committee Tuesday, telling legislators the money is needed by local governments for a host of road repairs and bridge replacements.\nCommittee members listened politely to more than an hour of testimony about the bill. Then, in an unusual move, they sent the measure to the budget-writing House Ways and Means Committee without a vote.\nRep. Gary Cook, chairman of the Roads and Transportation Committee, said he was concerned the bill might have failed at this early stage, killing the proposal, so the committee advanced it without voting.\nIf it becomes law, it would be the first gas tax hike since 1988. That penny-per-gallon increase also funded road work. As now written, a motorist who drives 12,000 miles a year in a car that gets 20 miles per gallon would pay an extra $18 a year.\nBesides the 3-cent increase, the bill would increase the diesel gasoline tax by one cent.\nThe governor says the state's existing road-building program is fully funded. "At this point, we don't see a gas tax increase as necessary," said O'Bannon spokesman Thad Nation.\nThe Build Indiana Council, a coalition composed mostly of the highway construction industry, is pushing the measure, which it estimates could result in $325 million annually for roads by 2004.\nLawmakers are looking for more money for road and transit projects while they write a tighter state budget for the next two years. In the past four years, they allocated $50-100 million a year in gambling revenue for local road construction. None of the new budgets under consideration includes money for this purpose.\n"Clearly, we have a balloon payment coming," said Dennis Faulkenberg, representing Build Indiana and other road-building groups.\nIndiana's gasoline tax, now 15 cents per gallon, still would be a penny lower than the 19-cents-per-gallon national average cited by the Federation of Tax Administrators in Washington after the increase.\nSome of the money raised by the tax increase would pay for bridge repair. A study released last week by Purdue University found that about 30 percent of all county-maintained bridges in the state are either structurally or functionally deficient. Replacing them would cost $616 million.\nThe Senate will hold a hearing next week on a bill that would divert motor fuel sales taxes toward transportation projects including not only roads, but airports, mass transit and high-speed rail development.