When gasoline prices are high, the idea of raising Indiana’s gasoline tax sounds even less appealing than unusual.
But that’s the recommendation of a new report on the state’s future priorities. We’re running out of money to build and repair roads, and our tax on gasoline is lower than in most states.
A group called Watchdog Indiana thinks it has a better idea: Instead of raising the gasoline tax, spend more of it on roads and less on other expenses.
Of the 18 cents in taxes Indiana collects on each gallon of gasoline, only 12.8 cents goes to maintain roads and streets, according to Watchdog Indiana’s research.
Indiana took in $546 million from the gasoline tax last year. It spent $158 million on items other than keeping up roads and streets.
The state used $92 million from gasoline taxes for the Indiana State Police, making up slightly more than half of the state police budget.
Gasoline taxes also contributed $40 million to operating the Bureau of Motor Vehicles, the other major category of nonhighway spending.
Watchdog Indiana contends that state police spend much of their time on law enforcement not related to road patrols. We don’t pay for sheriff’s and police departments with gasoline tax, so why do we use it for the state police?
As for the Bureau of Motor Vehicles, we think vehicle taxes and license fees should pay for its operation. Any subsidy from gasoline tax is simply a trick to keep vehicle excise taxes lower.
Watchdog Indiana is pushing the Indiana Gas Tax Reform Plan as a solution to all of this. The plan calls for spending 86 percent of gasoline taxes on roads and streets, instead of the current 71 percent.
Under the reform plan, most of the extra money for roads and streets would go to counties, cities and towns. The state highway fund would get only 2 percent more money. Local government would see about 45 percent more funding.
Watchdog Indiana thinks sending more gasoline tax money to local government could halt the trend toward wheel taxes. Currently, 47 of Indiana’s 92 counties impose wheel taxes of up to $40 per vehicle.
The watchdog group thinks wheel taxes are unfair, because they tax all vehicle owners the same, regardless of how much they drive.
In contrast, gasoline taxes bear a close relationship to the amount of highway use (though that may change as we get more hybrids and electric cars).
The reform plan raises a key question: How would Indiana replace the gasoline tax money that would be taken away from the state police and Bureau of Motor Vehicles?
Watchdog Indiana’s answer: The state’s financial reserves have recovered to the point that we can use our main revenue sources (income and sales taxes) to pay for state police and the BMV.
Watchdog Indiana has lined up lawmakers who say they’ll push the Gas Tax Reform Plan in the 2013 session of the Legislature. We hope our local legislators — most of whom will be brand-new next year — will give the reform plan a serious look.
© 2024 KPCNews, Kendallville, IN.