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Indiana GOP announces details of tax-hiking roads plan

BRIAN SLODYSKO and DARCY COSTELLO

Associated Press

INDIANAPOLIS (AP) — The Republicans who control the Indiana Statehouse announced details of an agreement Thursday that would raise taxes on motorists in order to pay for improvements for crumbling infrastructure.

It was an unusual victory lap for top GOP leaders who have been more accustomed to championing tax reductions over the last decade.

“We want them to start smelling asphalt in July,” House Speaker Brian Bosma said. “That is when the taxes increase, the user fees increase.”

The agreement, a Republican priority, is expected to come up for a vote Friday before lawmakers adjourn for the year. Indiana Gov. Eric Holcomb has signaled that he will sign it.

The measure would raise fuel taxes by 10 cents a gallon while creating a new $15 vehicle registration fee. Hybrid owners would have to pay a $50 fee, and electric-car owners would have to pay a $150 fee.

The measure also shifts all sales taxes that are also charged on fuel purchases to infrastructure spending by 2025. Much of that money now pays for other priorities, but lawmakers are counting on revenue growth from other taxes to cover the loss.

Republicans say their plan makes sense: By relying on vehicle fees and gas taxes, they are asking people who use the roads most to pay for them.

But Democrats point to the state’s roughly $2 billion budget reserve and question why the GOP wants everyday motorists to pay more — especially after seeing a decade of Republican-led tax reductions shift the tax burden away from the rich and onto the poor and working class.

In recent years, Republican-championed policies have eliminated taxes on inheritances worth more than $100,000, cut corporate tax rates and cut property taxes. At the same time GOP lawmakers have increased the state’s reliance on sales tax, which disproportionately affects poor or working class people.

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