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Indiana's New GOP Governor Calls for Tax Hike to Fund Roads

Indiana Gov. Eric J. Holcomb recommended a tax hike to fund roads and bridges, one of his new administration's five pillars he presented during his first State of the State speech Tuesday.

By Ken de la Bastide

Indiana Gov. Eric J. Holcomb recommended a tax hike to fund roads and bridges, one of his new administration's five pillars he presented during his first State of the State speech Tuesday.

Without stating an exact figure, Holcomb said he and the legislature would likely consider a hike and ask Hoosiers to "invest a little more to meet the need."

"I'm a believer that every time you ask a taxpayer for a dollar, you better be darn sure you need it and are going to use it effectively," he said. "Here's a case that if we ask Hoosiers to invest a little more, to meet the need, the return is going to be well worth it for them, for our communities and for our economy."

He urged legislators to develop a sustainable plan to fund the road infrastructure for the next 20 years. Any proposal that passes the legislature will likely include an increase to the state's 18-cents-per-gallon gasoline tax, experts have said.

Holcomb also proposed road projects in "every quadrant" of the state including upgrades of U.S. 30 to interstate quality between Fort Wayne and Valparaiso, a border-to-border complete Interstate 69 and added lanes on Interstate 65 between Jeffersonville and Crown Point. To cover funding, the governor said he would be open to a "menu of options."

Concerning a proposed 10-cent gasoline tax and $15 annual registration fee to improve Indiana's road network, Holcomb said he was open to a menu of options.

"The fact is, existing sources of revenue are just not keeping up," he said.

Just after a week and a day of being sworn into the job, Holcomb spoke for 26 minutes addressing legislators and invited guests in the House chamber at the Statehouse. As he did in his inauguration speech on Jan. 9, he spoke of the Hoosier pioneering spirit that helps Indiana overcome challenges.

Holcomb also called for eliminating the position of superintendent of public instruction as an elective office. He proposed that the state's top educator be an appointment by the governor by the year 2020.

"Education is a key to our state's future," Holcomb said. "I've long been committed to the notion that, as the state's chief executive, the governor should set education priorities and be held accountable for the results. Regardless of party, the governor should be able to choose his or her key education partner."

The remark brought applause from the gathered Republican lawmakers, but none from Democrats, who want to keep the post elective.

In funding education needs, he recommended in part doubling the state's annual investment of pre-kindergarten education, raising the amount to $20 million. Holcomb said the state will spent $10 million more on the pilot pre-K program in five counties, $1 million annually on coordinating STEM (science, technology, English, math) and another $1 million each year to bring wi-fi to public schools.

Rep. Mike Karickhoff, R-Kokomo, said the Republicans have presented a good road plan.

"We're going to dedicate the money," he said. "There will be $390 million going back to local units of government."

Karickhoff said the cities, towns and counties in Indiana support the proposal.

Holcomb unveiled what he called "transformational" pillars to take Indiana into the next century.

The five pillars included: diversifying the economy; long-term road funding; developing a skilled workforce; attacking the drug epidemic; and providing government services at a value to taxpayers.

"These five pillars are where our team will focus every day on ways to take our state to the next level," Holcomb said, "to make Indiana the very best place to live, work, play and stay."

Other key elements presented by Holcomb included:

--A $1 billion investment over 10 years to make Indiana the capital of innovation and entrepreneurship through the Next Level Indiana Fund, the 21st Century Fund and other grant programs.

--An additional $4 million in the two-year budget for the Regional Cities Initiative and $2 million for a "Jobs Ready Grants" program to train skilled workers.

--Exempting veterans' pensions from state income tax.

--A pay raise to Indiana State Police.

Holcomb said in the next 10 years Indiana will need 1 million new workers, 700,000 to replace retiring "baby boomers" and 300,000 for new jobs that will be created.

"As we lead Indiana into our third century, even as we sustain those many things we're doing well, let's not be afraid to think big, be bold, and act with courage," he closed.

In the aftermath of the speech, Indiana Democratic chairman John Zody said Holcomb failed to address the issue of wage growth.

"The word 'wage' never appeared in his speech at all. If we are truly going to take Indiana to the next level, the governor needs to have a plan for growing wages that continue to fall behind the rest of the nation. Truly building Indiana's future begins with expanding Pre-K, fulfilling our commitment as the Crossroads of America, and making Indiana a place where everyone is comfortable living and raising a family -- on a wage that allows them to thrive," Zody said in a prepared statement.

(c)2017 The Herald Bulletin (Anderson, Ind.)

Caroline Cournoyer is GOVERNING's senior web editor.
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