INDIANAPOLIS (AP) - New Indiana Gov. Eric Holcomb avoided directly calling for a tax increase during his State of the State speech Tuesday night, instead dancing around the subject by suggesting motorists should be asked “to invest a little more” for proposed infrastructure improvements.
“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 for its intended purpose,” the Republican said during his remarks that lasted nearly 30 minutes. “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.”
Finding a way to pay for Indiana’s poorly rated roads and bridges has emerged as a dominant theme this legislative session. Holcomb, who took office last week, and the GOP-controlled Legislature all seem to agree that more revenue is needed to do so - and will likely come through a tax increase.
But thus far, many key players, including Holcomb, have refused to offer specifics. The GOP-controlled House has called for new vehicle registration fees and a 10-cents-per-gallon increase to the state’s 18-cent gas tax. Senate leaders have not said what they will support.
While Holcomb didn’t specifically mention a tax increase by name during his speech, his aides sent out an email Tuesday emphasizing that he supports “a range of options - including fuel tax increases.”
Democrats, meanwhile, are relishing the opportunity to criticize Republicans. They portray Holcomb, who has never before held elected office, as an inexperienced, rookie governor.
House Minority Leader Scott Pelath equated Holcomb’s handling of the issue to “sending the Republican members of the General Assembly across the minefield.”
“I was looking to hear one thing in particular and I did not hear it … he did not use the ’tax’ word,” the Michigan City Democrat said. “If you’re going to propose tax increases you need a chief executive to go sell that plan. And it appears to me that he is not willing to do that.”
Democrats also note that the proposed taxes and fees will affect all motorists. This comes after a decade of Republican-backed tax cuts that economists say has shifted the burden away from the wealthy and onto the middle and working classes.
Still, Indiana’s infrastructure has been given poor marks by consulting groups and the American Society of Engineers. The issue was a political liability for former Gov. Mike Pence in fall 2015 after monthlong emergency closure of an Interstate 65 bridge near Lafayette. The political attacks that followed led him to push for a short-term increase in roads funding, though Pence opposed raising taxes.
Since then, GOP leaders have said they can’t continue to make improvements without finding a new way to pay for them, and they’ve ruled out tapping the state’s roughly $2 billion reserve fund or using existing revenues.
But it could be a tricky sell in a conservative state that has long resisted higher taxes. And it creates an awkward situation for roughly two dozen Republicans who signed a pledge by conservative activist Grover Norquist, promising never to raise taxes.
If Holcomb were to get out in front of the issue and driving a message, it could go a long way in giving tax-averse Republican lawmakers political cover to support a hike.
Republican House Speaker Brian Bosma said he isn’t relying on Holcomb to shield his members.
“We don’t need political cover. We need political courage and we’re showing it,” Bosma said after the speech.
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