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Indiana to see 1-cent gas tax increase

The 1-cent increase going into effect next month was part of a smaller section of the bill, The Journal Gazette reported . The increase is part of an annual inflationary adjustment that\'ll continue through 2024. Photo courtesy MGN

INDIANAPOLIS (AP) — A gas tax increase will soon go into effect in Indiana.

Lawmakers passed a bill last year that raised the 18-cent per gallon tax by 10 cents in order to fund road repairs.

The 1-cent increase going into effect next month was part of a smaller section of the bill, The Journal Gazette reported . The increase is part of an annual inflationary adjustment that'll continue through 2024.

"I don't think the public is aware," said Democratic Rep. Phil GiaQuinta of the small annual increase.

GiaQuinta said he opposed the bill because it means lawmakers don't have to vote each year in order to raise the tax.

Indiana had the nation's seventh-highest state tax and fee on gasoline as of April, according to the American Petroleum Institute, putting it behind Pennsylvania, California, Washington, Hawaii, New York and Michigan.

The average price for regular unleaded gasoline in Indiana is $2.88, compared to $2.09 last year, according to the American Automobile Association.

The special fuel tax rate will increase by one cent to 48 cents, said Emily Landis of the Indiana Department of Revenue.

The gas tax increase is expected to generate $31 million annually and some of the funds will be distributed to local governments, Landis said.

The state's gas tax last increased in 2003. Indiana residents are also paying a new $15 car registration fee, though hybrids come with a $50 fee and electrics cars have a $150 fee.

The overall package will fund a 20-year infrastructure plan projected to cost $32 billion. The first five years of the program includes $4.7 billion for state roads and bridges.

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