Gas pump advertising campaign targets Indiana fuel tax hike

AP News
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Posted: Feb 06, 2017 4:47 PM

INDIANAPOLIS (AP) — A trade association will soon adorn gas pumps across Indiana with ads opposing a Republican plan to use higher fuel taxes to pay for infrastructure repairs, a tricky sell in a conservative state much more accustomed to cutting taxes than raising them.

The ads at gas pumps, filling stations and convenience stores will include the contact information for state lawmakers, a hardball tactic urging motorists to voice their opposition to the plan that would raise fuel prices by at least a dime a gallon.

"Our message was getting lost," said Scot Imus, executive director of the Indiana Petroleum Marketers and Convenience Store Association, who provided information about the campaign to The Associated Press. "Our association is not the most powerful in town, but the one thing we do have is we see customers — thousands of them."

Republicans who have long embraced lower taxes dominate Indiana government, but fixing the state's crumbling roads and bridges has proved to be a vexing challenge.

Indiana is not alone, either. The country's infrastructure is aging and will require a significant investment to maintain or improve it in the coming years. At the same time, revenues from gas taxes — which many states have not increased in more than a decade — are dropping off as cars become more efficient.

More than a dozen states — including several under GOP control — are debating some sort of a fuel tax increase to pay for infrastructure improvements. California, Indiana, Mississippi, New Mexico Oregon and Oklahoma, among others, have active bills that would change fuel taxation in an effort to raise more money, according to the National Conference of State Legislatures. A similar GOP-backed fuel tax increase went into effect in Michigan last month, increasing the cost of gas by 7 cents and diesel by 11 cents.

In Indiana, borrowing money, tapping the state's $1.8 billion reserve fund or cutting programs have been non-starters. And Republicans who have supermajorities in both chambers of the Legislature say they want a dedicated stream of funding for roads, paid for by people who use them the most.

But it's an awkward conversation for House Speaker Brian Bosma, who is spearheading the proposal, as well as his Republican allies in the Legislature, who have been busy cutting taxes over the past decade. Unlike those cuts in income taxes, property taxes and corporate taxes, which favor the wealthy, the tax hike Bosma is pushing for would affect motorists of all economic backgrounds.

Democrats, meanwhile, are trying to capitalize on the GOP's newfound willingness to raise taxes. House Minority Leader Scott Pelath announced an alternative infrastructure funding plan Monday that would block the scheduled implementation of additional corporate tax cuts but not affect gas prices.

"The problem we have up to this point is not a problem of revenue — it has been a problem of priorities," Pelath said.

In 2015, former Gov. Mike Pence — now the vice president — was mercilessly attacked by Democrats after an emergency closure of an Interstate 65 bridge near Lafayette led to a one-month detour. But in an election year, Pence did not want to raise taxes to pay for roads so a stop-gap roads spending measure was approved instead.

With Pence gone, Republicans now hope to pass a package of tax increases that would raise the cost of fuel, vehicle registration and allow for fuel taxes to increase with inflation in the future. Republican Gov. Eric Holcomb, Pence's successor, has said he is open to a fuel tax increase, but he has not taken a prominent role in advocating for the increase.

The convenience store association is just the latest to come out in opposition to the plan by House Republicans. Conservative activists have targeted Bosma on social media by labeling the proposal with the hashtag #BosmaGasTax. And Americans for Prosperity, the political wing of billionaire industrialist brothers Charles and David Koch, plans to organize volunteers who will speak in opposition to the tax with motorists at gas stations. Conservative anti-tax activist Grover Norquist's group Americans for Tax Reform has also jumped in the fray, writing in a letter to legislators that they will be "educating your constituents" about the increase.

Imus said businesses that are part of his association stand to lose big — especially in areas that border other states. The Legislature is also considering a plan that would raise the state's current $1-a-pack tax on cigarettes to $2.50.

Imus pointed to industry figures showing that, if approved, the roads funding proposal would make Indiana's gas tax burden higher than its neighbors Ohio, Kentucky, Michigan and Illinois.

Along the Ohio River, the hike would create a strong incentive for people to cross over into Kentucky where both gasoline and diesel would be drastically less, he said.

One proposed ad the convenience store group is considering asks: "Guess who's responsible for paying Indiana's NEW GAS TAX?" Next to it there's a cutout of a head with the words, "your face here."

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AP Writer Darcy Costello in Indianapolis contributed to this report.

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This story corrects the spelling of Scot Imus' first name.