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Request a DemoIndiana’s sales tax on gasoline will jump by two cents a gallon for April as the rate increases for the third consecutive month — and at least one Republican candidate for governor is trying to make the gas tax a campaign issue.
The gas sales tax rate will be 18.9 cents a gallon starting April 1 under an update released Thursday by the state Department of Revenue. The rate had fallen in March to 15.5 cents, the lowest since May 2021.
The rate fluctuates because Indiana’s 7% sales tax on gasoline is calculated monthly, in addition to a flat tax of 34 cents a gallon directed to road projects that is poised to increase by a penny in July.
GOP gubernatorial candidate Curtis Hill has called for a reduction in the state’s gas taxes — a move that Republican legislators have rejected when sought by Democrats.
The new 18.9-cent sales tax rate will be the highest since November’s 20.3 cents.
The rate spiked to more than 29 cents a gallon in the summer of 2022 as gas prices soared following the Russian invasion of Ukraine.
After Republicans rejected calls from Democratic legislators in 2022 to suspend the gas sales tax temporarily, GOP fiscal leaders inserted a provision in the 2023 state budget bill that extended the annual one-cent increase in the flat tax for road projects.
That increase has been allowed each July since 2017, when a Republican-sponsored plan boosted it to 28 cents from 18 cents. The annual increase was set to expire in 2024, but it was extended until 2027.
The state government will collect a total of 52.9 cents a gallon from the two gasoline taxes for April (18.9 cents from the sales tax and 34 cents from the flat tax rate).
Hill, the former state attorney general, said during a candidates forum this week that the higher gas tax “has generated lots of revenue but has taken money directly out of the pockets of folks.”
“We can go back to 2018 levels and right away we can say 16 cents per gallon every time you fill up the tank,” Hill said. “That’s a small step in the right direction.”
Gov. Eric Holcomb has sided with Republican legislators who argue the gas tax revenue is needed to maintain the state’s highway construction program.
Holcomb said last week he wanted to hear more from the gubernatorial candidates about extending the state’s “20-year, $60 billion roads and bridges program.”
“We’re going to need more as our fuel taxes fluctuate,” Holcomb said.
Indiana’s combination of gasoline taxes gave it one of the five highest total state rates in the country as of last July, according to the Washington-based Tax Foundation.
Indiana’s pump price for gasoline has increased about a quarter per gallon in the past month. Tracking from AAA showed Friday’s state average gas price for regular unleaded was $3.51 a gallon, up from $3.23 a month ago.
Tom Davies is a Statehouse reporter for State Affairs Pro Indiana. Reach him at [email protected] or on X at @TomDaviesIND.
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How McCormick, Braun view abortion, taxes and other key issues
A Democrat-turned-Republican and Republican-turned-Democrat will soon face off in the race to become Indiana’s next governor.
Sen. Mike Braun, who voted as a Democrat prior to 2012, captured the Republican nomination in Tuesday’s primary. Jennifer McCormick, formerly a Republican Superintendent of Public Instruction, will represent the Democrats.
Voters will decide the state’s next chief executive in November.
A State Affairs analysis of the candidates’ campaign platforms and public statements found key differences — and a few similarities — in their planned approaches to a variety of issues impacting Hoosier voters.
Here is how they match up.
Abortion
Braun: As a senator, Braun has long supported abortion restrictions.
In 2020, he called for the Supreme Court to re-examine Roe v. Wade.
In 2023, he proposed federal legislation that would have required parental notification before any unemancipated minor could seek an abortion. He said at the time: “Hoosiers put their trust in me to stand up for the unborn, and that’s what I’ve been proud to do every day in the Senate.”
He has since signaled support for the state’s abortion ban. His platform reads: “State lawmakers must work to ensure the gains we have made to protect life are secured and strengthened.”
McCormick: In a Tuesday interview with State Affairs, McCormick said her candidacy represented a referendum on reproductive rights.
“I’m going to fight to restore those rights under any authority I can, working in a bipartisan fashion, using our committees, board and our agencies. I also know, too, what everybody’s fear is: that they’re [Republicans] not going to restore those rights and will take [restrictions] further.”
From her platform: “Indiana’s Republican-led extreme abortion ban has taken away the right of women to make deeply personal decisions regarding their own health care.”
Marijuana
Braun: At a March 26 Republican primary debate, Braun suggested an openness to legalizing medicinal marijuana.
“It’s gonna hit all of us. I’m gonna listen to law enforcement — they have to put up with the brunt of it,” he said. “Medical marijuana is where I think the case is best made that maybe something needs to change. But I’ll take my cue from law enforcement there as well. … I hear a lot of input where [medical marijuana is] helpful, and I think that you need to listen and see what makes sense.”
McCormick: The Democrat’s platform also addresses medical marijuana legalization, while speculating on possible recreational use.
“We will fight for the legalization of medical marijuana as a source of state revenue established on a well-regulated marketplace and monitored by a Cannabis Task Force in order to study the issues, opportunities and potential obstructions associated with recreational marijuana legalization.”
McCormick said she would also support expunging low-level marijuana-related convictions.
Taxes
Braun: At a March 19 National Federation of Independent Business forum, Braun said the state’s property tax system “went out of whack because it couldn’t respond to inflation like we’ve never seen before.”
“The way you finance any lower taxes would be to bank on the government being run more efficiently,” he said.
His platform also calls for government spending cuts to finance lower taxes: “Reducing the size of government is the key to cutting taxes, and Mike Braun will work through every state agency to find ways to save money while delivering high-quality services to taxpayers.”
McCormick: McCormick also spoke about taxes at the March 19 forum.
“I agree with a revamp of our taxing system,” she said. “But also it’s about not just how we’re getting our revenue, it’s about our expenditures. Yes, we need to fix our gas tax. Yes, we need to look at the income tax. But here’s the thing: There are hidden taxes we’re not having a conversation about.”
Her platform also references the possibility of combining state agencies as a way to save money.
Education
Braun: In his platform, Braun supports broadening school choice and parental rights.
“As a former school board member, Mike Braun knows parents are the primary stakeholders in their children’s education and every family, regardless of income or zip code, should be able to enroll in a school of their choice and pursue a curriculum that prepares them for a career, college or the military,” the platform reads.
Braun also pledged to ensure critical race theory and discussions about gender are banned in public schools.
McCormick: Education is one of McCormick’s primary issues, according to her platform.
She calls for the elimination of statewide testing, increased early childhood reading and child care options and a minimum base salary of $60,000 for all K-12 teachers.
McCormick also addresses the state’s school choice movement.
“We will call for a pause in the expansion of school privatization efforts while requiring fiscal and academic accountability and transparency for all of Indiana schools that receive public tax dollars,” her platform reads.
U.S.-Mexico border
Braun: Braun’s television ads have touched on border security, and his platform calls for increased focus on the area.
“Joe Biden and the left have created a humanitarian and national security crisis on our southern border,” the platform reads. “As governor, Mike will continue to support and enact the America First policies that were working. Otherwise, every town will become a border town.”
McCormick: McCormick’s border-related plans are more focused on facilitating legal immigration.
“We will work with local, state and federal officials in supporting an immigrant system that creates a safe, timely, orderly and humane pathway for those seeking legal immigration while keeping our communities and those responsible for border security safe,” her platform reads.
Contact Rory Appleton on X at @roryehappleton or email him at [email protected].
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