The Indiana Senate Tax and Fiscal Policy Committee voted last week to send HB 1002, which imposes a whopping 30 percent hike in the state’s gas tax, to the senate floor. Although key parts of the House’s plan remain intact, such as the gas tax increase and opening tolls on some interstates, the senate committee made the following amendments that will harm Indiana taxpayers:
- Phases in the gas tax over the next two years
- Decreases the total diesel tax increase from $0.10 to $0.06
- Continues diverting the sales tax on gasoline to the general fund
- Imposes new $5 tire fee
- Imposes new $100 commercial license plate fee
The overwhelming support to increase the state’s gas tax coming from Indiana lawmakers stands in stark contrast to their behavior during the 2016 legislative session, for which they were deemed the “Most Conservative House of Representatives” in the country by the American Conservative Union. Since winning that award, however, Indiana lawmakers have changed course and decided they would rather raise taxes than reform state government.
For example, 21 of the 61 representatives who voted for HB 1002 broke their Taxpayer Protection Pledge, a written commitment elected officials make to their constituents to oppose and vote against any and all efforts to increase taxes. Indiana representatives also included a $1-per-pack cigarette tax increase in their budget proposal ( HB 1001)— a move that not only seeks to balance the budget off of the backs of low-income consumers, but also relies heavily on an unstable and declining source of revenue. Fortunately for taxpayers, senate legislators axed this part of the proposal.
Although the state senate nixed the tobacco tax increase, an increase in the state’s gas tax is close to being on its way to Gov. Eric Holcomb’s desk.
Members of the Indiana House and Senate claim transportation is a top priority for them, but their push for a tax hike indicates otherwise. Lawmakers who claim tax hikes are needed for transportation are admitting that said transportation projects are actually their lowest priority. Were that not the case, they would not have funded everything else in the budget first.
The fate of the full gas tax increase will be decided when the full Indiana Senate votes on HB 1002 this week. Indiana taxpayers have been hit with 20 federal tax increases over the last eight years. We’ll soon find out if lawmakers in Indianapolis are going to pile on with more job-killing tax hikes at the state level. One thing is clear, Indiana lawmakers don’t deserve to win any more awards for conservatism.