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Indiana, Tennessee at Forefront of Possible Wave of Fuel-Tax Hikes

Spencer Platt/Getty Images

With the contentious 2016 election over and few officials on the ballot again until 2018, transportation stakeholders believe that the current state legislative sessions could see fuel taxes raised to cover large funding shortfalls. Only New Jersey, which has off-year elections, did so in 2016.

According to the American Road and Transportation Builders Association, half of the 22 transportation bills currently being considered by six state Legislatures (Arizona, California, Indiana, Missouri, New Mexico, and South Carolina) include fuel tax increases. That doesn’t include Tennessee, where Gov. Bill Haslam is pushing that state’s first increases since 1989.

“What we’re seeing is in line with what we saw in 2015 [when eight states raised fuel taxes] and past [non-election] years,” ARTBA Chief Economist Alison Premo Black told Transport Topics. “Now that the election is over, states are going to be getting back to the business of trying to raise revenues and address their real infrastructure needs. This is truly still a bipartisan issue, and it’s still early in the cycle, so I think we’re going to see more bills introduced.”

Indiana hasn’t increased its diesel tax in 29 years, nor its gas tax in 14 years.

“There’s more momentum than there has been in the last five years,” said Gary Langston, CEO of the Indiana Motor Truck Association. “We started focusing on transportation funding last year, but given that it was an election year, it didn’t happen. Now that we have a new governor, there’s a whole new perspective that now’s the time.”

With newcomers in the governor’s mansion (Eric Holcomb) and as chairman of the Senate Homeland Security and Transportation Committee (Michael Crider), veteran state Rep. Ed Soliday, House Roads and Transportation Committee chairman, remains the major driver of Indiana’s transportation funding legislation. On Jan. 25, Soliday’s committee voted 8-5 to approve a bill that jumps the diesel tax to 47 cents per gallon from 27 cents. The gasoline tax would rise to 28 cents per gallon from 18 cents before a consistent 7% sales tax.

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By David Elfin
Staff Reporter

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