• Bill Raines

Republican Led Tax on Fuel are placing burdens on Hoosiers Wallets

INDIANAPOLIS - MAY 23,2022 - Republicans in 2017, passed a fuel tax to Hoosiers that was expected to raise revenues over the next 20 years and is expected to raise more than $1.2 billion dollars by 2025.



The plan at the time was signed by Governor Eric Holcomb which included increases on diesel and commercial vehicles.


Many convivence stores and conservative groups criticized the plan throughout the legislative session at the time.



During the 2017 the registration fees were raised $15, $50 on hybrid vehicles, and $150 on electrical vehicles which the Republican led legislature labeled them as user fees.


The 2017 Legislation was expected to raise $6.4 Billion in the next seven years:

  • Increasing the motor fuel tax cents per gallon which started July 1, 2017

  • Indexing the motor fuel tax to inflation for the next seven years with a cap of 1 cent increase per year

  • Establishing a new $50 annual " infrastructure improvement fee for hybrid vehicle registration fee for electric vehicles

  • Establishing a new $15 annual infrastructure improvement fee and increasing the registration fees for trucks over 26,000 lbs

  • Gradually shifting sales tax to the State Highway Fund by 2022.



Indiana has a surplus of $6.1 Million Indiana Democrats are calling for the suspension of the gas tax when Indiana legislature convenes on May 24. This session normally is held to make corrections to bills and consider overriding vetoes.


Governor Holcomb said a gas tax should only be done in an energy emergency. The gas tax in Indiana is 32 cents per gallon. Sales tax on fuel changes monthly and is 24 cents for the month of May for a total of 56 cents state-imposed taxes.


The revenue from the gasoline fuel tax would be deposited into the general fund. However, this bill would place the revenues into the Motor Vehicle Highway, Local Road and Bridge, and Special Transportation flexibility fund.


The Indiana Chamber of Commerce supported the legislation back in 2017 which was the organizations top priority and praised the legislation.


During the time period the need for infrastructure improvements for roads and bridges are greatly needed. Costs for these types of projects were increasing at the time. Now with the rise in inflation these costs have risen even higher. Fuel tax revenues are the primary mechanism for funding these types of projects.


Fuel efficient vehicles, and the growing number of electric vehicles will impact the revenue to state transportation projects.


States will eventually also have to be looking on how to increase revenues based on the expansion of the fuel efficient and electric vehicles.


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