Pence Road Funding Proposal Could Nix State's Automatic Tax Rebate

Jan 12, 2016

Credit Jim Grey / https://www.flickr.com/photos/mobilene/4073489845

Legislators' quest for money for road maintenance may be the death knell for Indiana's automatic tax rebate.

Governor Mitch Daniels pushed through the law in 2011 giving taxpayers money back if the state surplus grew beyond 12.5-percent of spending.

The next year, Daniels' last as governor, the state cleared that threshold, and Hoosiers received $111 per taxpayer in 2013.

Governor Pence's road plan includes $240 million from the surplus, leaving the state an 11.5-percent reserve.

But Republican plans in both the House and Senate would capture that money not just this year, but every year.

House Speaker Brian Bosma (R-Indianapolis) says the automatic tax rebate passed because then-governor Mitch Daniels wanted it.

“We did concede to it and, quite frankly, I was never a fan,” Bosma says.

When the rebate was awarded in 2013, he says the overwhelming reaction from his constituents was quizzical, urging the state to "do something useful" with the money instead.

Senate Transportation Chairman Carlin Yoder (R-Middlebury) says he has problems with House Republicans' proposal to raise cigarette taxes to fund their road plan, but says they're in agreement that money already collected from Hoosiers should be the first option for roads before looking at new revenue.

“That’s, to me, the most fair way to do it, as opposed to saying that smokers should be the ones to pay for our roads or somebody else,” Yoder says. “This is a pretty fair, across-the-board way to fund roads and it’s excess money, we’re not raising taxes on anyone to do it.”