Indiana House Republicans on Jan. 4 released a $1.2 billion transportation funding proposal that would increase the state motor fuel tax by 10 cents per gallon, indexed to adjust annually according to changes in the Consumer Price Index for all Urban Consumers. The bill would also impose a new $15 annual “transportation infrastructure improvement” vehicle fee and a $150 annual electric vehicle fee. Additionally, House Republicans propose doubling the alternative fuel decal fee. (To learn how Indiana currently taxes alternative fuel, read ARTBA-TIAC’s “State Transportation Related Taxes and Fees on Alternative-Fuel and Electric Vehicles” report).

The proposed bill, House Bill 1002 (HB 1002), would also ensure that all revenue from the gasoline use tax (a sales tax on gasoline purchases) would be used for transportation purposes. Currently, only 14.286 percent is deposited into the motor vehicle highway account and 85.714 percent is deposited into the general fund. If HB 1002 is approved, the revenue currently going to the general fund would gradually be phased out, and would be redistributed to a local road and bridge matching grant fund and the state highway fund.

Read the House Republicans announcement.

Read more about Indiana state transportation funding.