Indiana gas tax higher than New York's!
When Brian Bosma, the longtime Indiana House speaker, was pushing for a 10 cent increase in the state gas tax in 2016 and 2017, the price of gas in Indiana was at times under $2 a gallon.
It’s now over $4 a gallon, and the same people who pushed for the gas increase, and voted for it, are nowhere to be found.
Bosma is no longer speaker. He’s an Indianapolis lobbyist.
Rep. Ed Soliday, R-Valparaiso, who authored the bill that raised the tax, did not return a call last week seeking comment.
Indiana’s gas tax is now the seventh highest in the country, and is actually higher than New York’s. I’m not kidding.
Indiana’s gas tax is also higher than Florida’s, and Florida doesn’t have a state income tax. Does everything have to be better in Florida?? They have 663 miles of beaches and aren’t pushing the Covid-19 vaccines on 2-year-olds. Couldn’t Indiana at least have a more favorable tax climate??
The total tax that Hoosiers pay on every gallon gasoline they pump is 68.8 cents (a little higher than the chart above as I’m using the very latest figures that came out of the Indiana Department of Revenue last week).
Here’s the breakdown:
State gas excise tax — 32 cents a gallon
State gas use tax — now 18.4 cents a gallon
Federal gas tax — now 18.4 cents a gallon
And unlike with other taxes, they’re not added on to the total purchase of the product. All three of these taxes are included in the list price of gas. So if you’re paying exactly $4 a gallon for gas, $69 cents of this is taxes. The gas you’re buying (minus the taxes) is actually $3.31 a gallon.
If you fill up your tank with 15 gallons of gas, congratulations! You just paid more than $10 in gas taxes.
On March 10, the Indiana chapter of the National Federation of Independent Businesses called on the Indiana General Assembly to temporarily suspend the 32 cent gas excise tax, saying the situation posed by spiraling gas prices is “dire.”
So dire that the NFIB is asking the General Assembly to convene a *special legislative session* to suspend the tax.
There was no response to this from legislative leaders — from either House Speaker Todd Huston or Senate President Pro Tem Rodric Bray. Nor was there any response from Gov. Eric Holcomb or from Lieutenant Gov. Suzanne Crouch, who serves as president of the Indiana Senate.
I’m told Crouch wants to be the next governor. If so, now would be the time for her to speak up.
Hello, Suzanne?? Are you there??
The NFIB is a fairly big deal. It’s the largest small-business association in the United States and they have 10,935 members in Indiana — most of them mom-and-pop businesses, but also many small manufacturing companies and also some farmers.
So I’m surprised this didn’t get more attention.
The NFIB is usually the side you want to be on if you’re a Republican legislator who likes to call himself a “fiscal conservative.”
Before the increase imposed by the 2017 bill — which Gov. Eric Holcomb supported and signed — Indiana’s gas tax was 18 cents a gallon. The increase of 10 cents raised it to 28 cents a gallon, but Soliday’s bill also wrote in an automatic 1-cent-per-year increase. So now, four years out from implementation, it’s 32 cents a gallon. In ten years, it will be 42 cents a gallon, not including the use tax (equivalent to the 7% sales tax) and the federal gas tax.
The goal of the bill, Soliday said at the time, was to raise $1.2 billion a year for roads.
The Indiana Chamber of Commerce supported the bill.
The NFIB opposed it, as did Americans for Prosperity, which sent out mailers asking people to call their legislators and tell them to vote no.
The Coalition of Central Indiana Tea Parties also vehemently opposed the bill, and testified against it at the Indiana Statehouse.
“Now here we are five years later and Indiana has billions of dollars in surplus…which indicates to us that the tax wasn’t warranted,” says Rick Barr, the coalition’s public relations chairperson.
Michael Morris, also with the coalition, says it seemed to them at the time that the bill was just a giveaway to engineering firms, and that it appeared from the start, “the fix was in.”
“It was a lot of sleight of hand there. It just stunk all the way around and that’s why we opposed it,” he says.
Morris says Mike Braun, who was serving in the Indiana House in 2017 and voted for the gas tax increase, came to talk to them when he was campaigning for the U.S. Senate.
“He said, ‘I thought it was the right thing to do,’” Morris remembers.
The Club for Growth refused to back Braun in his Senate run because of this gas tax vote.
Rep. Jim Baird, the congressman who now represents the 4th congressional district, with Lafayette at its center, also voted for the gas tax increase when he was in the Indiana General Assembly. Maybe voters didn’t know.
Just eight Republican members of the Indiana House voted against the gas tax increase: Rep. Bruce Borders, Rep. Ed Clere, Rep. Jack Jordan, Rep. Chris Judy, Rep. Bob Morris, Rep. Curt Nisly, Rep. Heath VanNatter and Rep. Timothy Wesco.
The vote in the House was 69-29, with most Republicans voting for it.
Interestingly, there are two legislative districts this year where two incumbent Republicans will be facing one another in the May primary. In one of them, in Greene County in Southern Indiana, Rep. Bruce Borders, who voted against the gas tax, is facing Rep. Jeff Ellington, who voted for it.
Borders (on left above) recalls there was “a lot of pressure” from Republican leaders on the legislators who were opposed to the increase, but that he resisted.
He says he didn’t buy the reasoning that the money was needed to repair the roads.
“My thought was there was indeed money to do it,” he said last week. “We could have done the things that we’re doing without raising taxes.”
The money didn’t actually all go to roads. In fact, if you read the bill, House Enrolled Act 1002 (2017), you see that for the first three years, more than half of the money raised from the tax increase went into the state’s general fund, with smaller amounts going into the highway fund and into the matching grant fund to help cities and towns pay for local roads and bridges.
The money raised was substantial, with the state getting a windfall of $300 million in additional revenues in 2018, the first year the tax was increased.
In that same year, the state brought in more than $1.4 billion in total fuel taxes, with diesel fuel and aviation fuel included.
In the Indiana Senate, the vote to raise the gas tax was 37-12, with just six Republican senators voting no:
Sen. John Crane
Sen. Aaron Freeman
Sen. Mike Delph (no longer serving)
Sen. Jean Leising
Sen. Mike Young
Sen. Erin Houchin
Erin Houchin is running for Congress in Indiana’s 9th congressional district, to replace Rep. Trey Hollingsworth, who is stepping down after three terms. In the crowded Republican primary in that open race, Houchin’s main competition is former Rep. Mike Sodrel, who represented the 9th congressional district from 2005 and 2007 and who owns a trucking company.
If Houchin had voted the other way on the gas tax, we can only imagine how that race for the Republican nomination would have gone.
Links:
2017 Gas Tax bill, HB 1002: http://iga.in.gov/legislative/2017/bills/house/1002#document-e6c910ce
NFIB calls for suspension of gas tax: https://www.nfib.com/content/news/indiana/nfib-state-director-calls-for-suspension-of-indianas-gas-tax/