Last week, the Indiana House of Representatives took a hard vote to pass a long term road funding bill.
The legislative package the House voted on, while not a final law, will raise $1.2 billion annually for long term road construction and repair funding. The proposed plan would be funded by a 10 cent per-gallon increase in the state gas tax with automatic adjustments for inflation. The plan also includes a $15 vehicle registration fee, and a $150 registration fee for electric vehicles. The Editorial Board supports the House’s decision to create a smart, long term funding plan for our roads.
The Hoosier state calls itself the “Crossroads of America” and our ability to participate in a global economy depends on the quality of our infrastructure, most importantly our roads.
The need to raise funding to invest in our roads has been apparent for some time. New, more fuel efficient cars have lowered revenues from gas taxes collected to fund road construction and the level of the gas tax has not been adjusted for inflation in almost 15 years. Instead of fixing this issue last year, the Statehouse put together a one-time, $800 million dollar fix that acted as a band-aid rather than a true solution to the problem.
The package passed this year deals with the problems last year’s session did not. The new fees fairly assess the tax on those who use the roads. If you buy gas, you pay the tax. While at first the $150 electric vehicle registration fee may seem strange, since electric vehicle owners use the same roads as combustion engine drivers. However, they do not pay the same gas tax. It makes sense EV owners have to pay a larger one time fee to account for their fair share.
The combination of gas tax increases and registration fees fulfills the state’s long term needs and fixing the gas tax to inflation ensures that such a politically charged issue does not come up for debate every year.
This saves Indiana’s part-time legislature time and money, and allows our representatives to focus on other concerns beyond road funding. The measure did not pass without opposition. Far right groups, ideologically opposed to any sort of tax increase, railed against the law. On the other side of the fence, Democrats favored dipping into the state’s reserves and raising corporate taxes instead.
Both these positions are understandable, but a true long term funding plan and common sense governance demanded new revenue sources. On the other hand, dipping into the state’s reserves threaten our AAA bond rating and would put the state on shakier fiscal footing in case of another recession.
The measure is likely to see change in senate, but the core of responsible user fees to create a long term roads plan for Indiana is the first step to making sure Indiana has the vital infrastructure it needs to stay competitive.