INDIANAPOLIS (AP) — A key Indiana lawmaker says the state might need a
license plate tax of $20 to $50 per car to pay for new road projects and
Senate Appropriations Chairman Luke Kenley, R-Noblesville, told the
Indianapolis Business Journal that such a tax, multiplied by about 6 million
state-licensed vehicles, would raise $120 million to $300 million at a time
when the Indiana Department of Transportation faces a budget shortfall as
high as $200 million.
“Our road infrastructure is more critically important to us than it ever
was,” Kenley said. “Somehow this needs to become a renewed major initiative
like Major Moves was for Mitch.”
Major Moves was Gov. Mitch Daniels’ project to lease the Indiana Toll Road
for $3.8 billion and use the proceeds for road projects across the state,
but all of that money will be committed by next summer.
Kenley said the new license plate revenue could be used to start planning
expansions of Interstates 65 and 70 and to revive plans for the Indiana
Commerce Connector that would loop around Indianapolis’ eastern and southern
suburbs, from Interstate 69 to the Indianapolis International Airport.
Daniels recently revived talk about that project, and Kenley has said he
would like to see it studied.
He wants to expand I-65 and I-70 to six lanes across the state, with the
third and sixth lanes possibly dedicated to truck traffic. Preliminary work
already is under way at INDOT, said Troy Woodruff, the agency’s chief of
“At a minimum, we have to start the discussion on the transportation
infrastructure needs,” Kenley said. Expanding Medicaid and education funding
top lawmakers’ agendas for 2013, but Kenley said, “I’m hoping that next in
line is the transportation discussion.”
He acknowledged some people are likely to “get all bent out of shape” about
his talk of new taxes.
Indiana Chamber of Commerce lobbyist Cam Carter said the tax idea “triggers
the gag reflex,” but he supports user fees to provide new funding for the
state’s 12,000 miles of highways.
“We think we ought to get as close to a user-fee model as possible,” Carter
INDOT now funds highway projects and maintenance from 18-cent-per-gallon
taxes on gas, diesel and some other fuel, but revenues have fallen with the
growing popularity of fuel-efficient cars and trucks. No taxes come from
powering vehicles with electricity and natural gas.
INDOT Commissioner Michael Cline has told lawmakers the agency’s $200
million budget shortfall includes $70 million that’s needed to help Indiana
continue to draw down the maximum amount of federal road matching funding,
and $130 million for maintenance.
Another possible source of INDOT funding is the $550 million generated per
year by Indiana’s 7 percent sales tax on gasoline and diesel. Those funds
currently go to the state’s general fund.
"If we redirect the taxes we’re already assessing, the problem will take
care of itself,” said Dennis Faulkenburg, a lobbyist for the Build Indiana
Council, a trade group representing road construction companies.
Rep. Ed Soliday, R-Valparaiso, chairman of the House Transportation
Committee, said he’s writing a bill that would test a tax on the number of
miles traveled by each vehicle in Indiana. He said it would be the most
direct way of taxing users of road, regardless of the fuels their vehicles
“As you move to more alternative fuels, you’re going to have to think in
terms of other ways for paying for roads,” said Soliday, who has led study
committees the past two years analyzing infrastructure needs and shortfalls