AASHTO Journal

Indiana Legislation Hikes Fuel Taxes, Range of Fees to Boost Transportation Funding

The Indiana General Assembly approved a measure to increase fuel excise taxes and a wide range of user fees to eventually provide more than $1.2 billion a year for transportation infrastructure projects when it is fully implemented in 2024.

Gov. Eric Holcolmb signed it into law April 27, calling the measure "an infrastructure plan of historic proportions . . . a sustainable plan to fund our transportation infrastructure needs for the next 20 years."

dollarpump.jpgAccording to a legislative fiscal note, the measure would hike the state's gasoline tax by 10 cents a gallon in two steps, with a nickel increase July 1 and another nickel a year later. It would raise Indiana's diesel fuel tax by 6 cents, also in two steps starting in July. Both fuels would also be subject to annual inflation-index increases of up to a penny a gallon for six years starting July 1, 2019.

It also increases various vehicle registration fees, including a 50 percent increase in the decal fee for alternative-fuel vehicles. It levies a $150 supplemental registration fee on electric vehicles that do not pay per-gallon fuel taxes, with a $75 fee for alternative-fuel vehicles. And it raises a fee on the sale of new vehicle tires with proceeds to go into the state's Motor Vehicle Highway Account.

Among other provisions, it also increases an aviation fuel tax by 10 cents a gallon, allows the Indiana Department of Transportation – with the governor's approval – to seek a federal waiver in order to toll interstate highways and provides for an INDOT tolling feasibility study. It also expands potential uses of a state road construction fund to include railroad crossing projects, and authorizes the Indiana Finance Authority to issue bonds for track crossings through 2024. 

The fiscal analysis projected that in its initial year the funding bill would generate $328 million for the state highway fund, nearly $43 million for local road and bridge grants and $1.7 million for airport development grants. In the second year, it would put an extra $552 million into the state road program and $85 million more into local projects, the fiscal note said.

Questions regarding this article may be directed to editor@aashtojournal.org.

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