INDIANAPOLIS | Despite gasoline prices topping $4 a gallon, talk by House Democrats of temporarily suspending state gas taxes appears to be a nonstarter with the General Assembly's Republican majority.
Democratic Leader Patrick Bauer, D-South Bend, told reporters Tuesday he wants a three-month suspension of the state's gas tax and state sales tax on gasoline included in House Bill 1001 —Indiana's 2012-13 state budget.
Hoosiers pay a gasoline excise tax of 18 cents per gallon and 7 percent sales tax on gasoline purchases, plus an 18.4 cents per gallon federal gasoline tax. Bauer wants the Indiana taxes suspended for June, July and August.
Even with the loss in state tax revenue, Bauer said suspending gas taxes would produce a net benefit by stimulating the state's economy.
"People will be able to go to work and pay their income tax," Bauer said. "Truckers might be able to truck some more."
There is precedent for suspending Indiana gas taxes when prices soar. In July 2000, Democratic Gov. Frank O'Bannon suspended the state's sales tax on gasoline for three months when prices hit $1.80 a gallon.
Motorists saved $46 million as a result.
But House Speaker Brian Bosma, R-Indianapolis, said the Republicans' top priority is a balanced budget and suspending gas taxes in the final days of the legislative session wouldn't help.
"Despite the fact that we all wish gas was lower, shoveling money out the door has gotten California, Michigan, many other states in some very dire straits," Bosma said. "At this late date it's very difficult to consider."
Indiana is projected to end the two-year budget period in June 2013 with a surplus of more than $1 billion. Bosma said he's committed to protecting those funds which only exist if continued economic growth boosts state tax revenues.
Bauer said that hasn't stopped Republicans from seeking a cut in the state's corporate income tax rate, and asked: Shouldn't ordinary Hoosiers get a tax cut too?
"It's just a wonderful idea that will be shot down because it's not helping the rich. But we'll keep fighting for it," Bauer said.