Gov. Eric Holcomb is expected to sign into a law a $1.2 billion-a-year road funding package on Thursday, fulfilling a session-long pledge from all four legislative caucuses.
Here’s how that package will impact Hoosiers’ wallets.
Starting July 1, Hoosiers will pay an additional 10 cents per gallon in tax. The tax for regular gasoline in Indiana now is 18 cents and will increase to 28 cents per gallon. The tax for diesel will increase to 26 cents per gallon, up from the current rate of 16 cents.
The new tax rate puts Indiana in the middle of the pack compared to other states. The highest state tax on gas is in Pennsylvania with 58.2 cents per gallon. The lowest gas tax in the U.S. is Alaska’s 8.95 cents per gallon.
In Indiana, Hoosiers pay an additional sales tax at the pump. That tax will not increase, but lawmakers will slowly shift the revenue from the sales tax away from the general fund and use it for infrastructure improvements instead.
New and increased fees will begin on Jan. 1 2018.
The plan includes a new $15 registration fee for all vehicles, while large truck fees will increase by 25 percent. Electric vehicle owners will now pay a $150 annual fee, and hybrid vehicle owners will pay a $50 annual fee.
The road funding package opens the possibility for tolling on Indiana highways, but nothing concrete has been decided.
The Indiana Department of Transportation will ask the federal government for authority to establish tolls on Indiana interstate highways and conduct a feasibility study with an outside consulting firm.
If granted permission, Gov. Holcomb will evaluate that feasibility study and decide whether to move forward. If he does choose to move forward, he must get approval from the State Budget Committee.
Holcomb previously said he’s open to the idea of tolling.