DALLAS – Indiana would seek a waiver from federal authorities for tolls on existing Interstate Highways under a Republican-sponsored road funding plan adopted by the state House.
House Bill 1001, which was approved by a vote of 61-36 on Tuesday, directs the Indiana Department of Transportation to seek permission from the Federal Highway Administration to put tolls on I-65, I-70, and I-80/94 after conducting a feasibility study on the toll proposal.
The House proposal, sponsored by state Rep. Ed Soliday, a Republican from Valparaiso, would raise the state's gasoline tax by 4 cents from the current 18 cents per gallon and the diesel tax by 7 cents from the current 16 cents per gallon, as well as index them to inflation.
The bill also would cut the top state income tax rate to 3.06% in 2025 from 3.23% in 2017, and direct more of the state's 7% sales tax on gasoline to transportation projects.
The House approved bill must go before the Senate, which on Wednesday unanimously passed Gov. Mike Pence's five-year, $1.4 billion "21st Century Crossroads" funding plan that relies on $240 million of new highway bonds but no new taxes.
State Sen. Carlin Yoder, a Republican who sponsored the legislation containing Pence's proposal, said the decision of whether to issue the road bonds would not be made until after the General Assembly's 2017 budget session.
"As it looks now, the bonds may not even need to be part of the discussion," Yoder said.
Tolls on existing Interstate lanes have been prohibited by federal law since the 1950s.
Three states – Virginia, North Carolina, and Missouri – are allowed to levy Interstate tolls under a pilot program authorized in 1998 but neither has done so. The FAST Act transportation funding law enacted in early December gives those states until 2017 to use the slots or lose them to new applicants.
A transportation funding report last year said full tolling of Indiana's interstates could generate up to $33.6 billion over 30 years.
House Speaker Brian Bosma said the higher gas tax and other provisions in the House bill would generate $500 million per year of additional road funding.
"We have a lot of local options that are not included in the Senate program or the governor's program and of course we give a sustainable funding solution, which would cost the average Hoosier driver $25 a year," Bosma said.
Bosma said the General Assembly should be able to resolve the differences between the two proposals before the 2016 session ends in mid-March.
Republicans control the legislature, with 40 of the 50 Senate seats and 71 of the 100 House seats.
All the Democrats in the House voted against the Republican road plan, as did eight Republicans.
Soliday said the public will support the higher fuel taxes despite opposition from anti-tax groups.
"It's our responsibility to lead," Soliday said. "We're being very specific where the money is going to be spent, we're being very conservative in how it will be spent."
"We cannot run a government on ideology and sound bites," he said.
Pence said he prefers his funding plan to the House proposal.
"I'm very confident that we can meet the needs that Indiana has over the next four years to improve our roads and bridges without raising taxes," he said. "I think when you have money in the bank and the best credit rating in America, the last place you should look to pay for roads and bridges is the wallets and pocketbooks of hardworking Hoosiers."
