During the 2017 legislative session, I joined lawmakers to pass the largest ongoing investment in state and local infrastructure in Indiana’s history. Signed into law by Gov. Eric Holcomb, this measure is a comprehensive, responsible and sustainable plan to fund Indiana’s roads and bridges over the next 20 years.
Hoosiers will start seeing results of this investment beginning in July, as an additional $357 million in state and $260 million in local road funding will be released. This funding will continue to increase year-over-year.
We refused to shift the tax burden onto those who don’t drive or onto future generations through bonding. Instead, we focused on a conservative, user-pays model where those who use the roadways contribute to maintenance and improvement.
Indiana’s gas tax hasn’t increased since 2003, which means it’s been losing buying power each year due to inflation. Under the new law, Hoosiers can expect to pay an extra 10 cents per gallon of gas at the pump. Likewise, the tax on diesel, last adjusted in 1988, and other fuels will be increased at the same rate. These fees will be indexed annually for the next seven years, but won’t increase more than 1 cent per year.
Hoosier taxpayers made it clear that if user fees increase, the revenue should be directed to roads. Every cent from the above fuel taxes already go exclusively towards roads. Our plan moves further in this direction, phasing all of the remaining revenue generated through the sales tax on gas over to roads. By 2025, every cent of state taxes, both fuel tax and sales tax, collected at the pump will fund only roads and bridges.
To help support local roadways, the new law establishes a $15 annual registration fee on all vehicles, a $50 fee on hybrids and a $150 fee on electric vehicles. Electric and hybrids currently pay little to no gas tax. In all, the average Hoosier driver can expect to pay about $5 more per month to help maintain and improve our roads and bridges.
Overall, this sustainable, user-based approach will fund our transportation infrastructure for the next two decades without saddling future generations with debt.
Over the last decade, we have lowered income taxes, capped property taxes and eliminated the inheritance tax. By 2021, Hoosier taxpayers are expected to save $1.7 billion because of the individual income tax cut alone. We have also cut taxes and reduced burdensome regulations for job creators. In fact, businesses will save $2 billion as a result of corporate and financial institution tax cuts.
We have also greatly reduced the size of our state government to make it leaner and more efficient. These improvements were recognized by U.S. News and World Report, which ranked Indiana No. 1 for best state government in the nation.
Indiana’s economy is running strong and I will continue to focus on passing fiscally responsible policies that keep Indiana moving forward.
If you have questions or comments, contact me at 317-232-9981 or email email@example.com.
State Rep. David Frizzell
House District 93