John Tuohy, and Tony Cook

IndyStar

The debate over infrastructure funding this legislative session has created some strange bedfellows, a bizarro world in which unions attack Democrats and tax watchdogs bite Republicans.

More surprising still is it is happening in an election year with a filing deadline looming Friday.

Competing bills are in the legislature. House Bill 1001, approved Tuesday and sent to the Senate, is a patchwork of off-setting tax hikes, tax cuts and tax shifting over several years to raise $1 billion for the Department of Transportation. Senate Bill 333, backed by Gov. Mike Pence and expected to advance Wednesday to the House, doesn't raise taxes. A House Democratic plan that also was tax-free didn't advance.

The plans have quickly turned traditional political alliances on their head and the legislature into a place where Democrats get shot down for a plan that holds the line on taxes and Republicans insist hiking taxes is the responsible solution to the state's road woes.

"We've seen some groups get on the same side you never would have seen five years ago," said Andy Downs, associate professor of political science at Indiana University-Purdue University Fort Wayne. "That's what happens when you push off hard decisions and reach a point where there are few options."

House Speaker Brian Bosma, R-Indianapolis, has called the House Republican plan a long-term, sustainable solution. But it was a tough sell, especially to his own party members who took a no-tax pledge during past campaigns and are facing re-election this year. (See how your House representative voted here.)

On the other hand, lawmakers from both sides agree that state and local roads and bridges are in dire need of upgrades. Many said their constituents talk of little else and are willing to pay more in taxes.

"Now and then you have to stick your neck out and take risks," said Rep. Mike Braun, R-Jasper. "If we do the infrastructure thing right, it will move the economic needle some day."

The bill would raise the fuel tax 4 cents a gallon to 22 cents, the first fuel tax hike since 2002, and divert 4 cents of the sales tax on fuel from the general fund to roads and bridges. The bill also would hike the cigarette tax by $1 per pack, which would replace about $300 million a year in the general fund from the lost fuel sales taxes. Local road funding also would get a boost by assessing a registration fee on electric car owners of $100 a year and allowing cities to charge a "wheel tax" of up to $40 on registrations.

As a deal sweetener to tax-averse Republicans, the House last week added a personal income tax cut. Beginning in 2019 the rate would drop from 3.23 percent to 3.06 percent in 2026, a reduction of $367.3 million in revenue over that span.

The Senate bill Pence backs would use $241 million in state surplus funds, $240 million through borrowing and $450 million in legislative appropriations to raise more than $1 billion over the next four years.

Opponents of the House bill say it is an exercise in futility because Pence is unlikely to sign anything with a tax increase, a position he has reiterated throughout the process.

"Everybody knows that the Republican tax plan is never going to see the light of day, so I'm not sure why they are even pursuing it," Rep. Cherrish Pryor, D-Indianapolis, said.

Pryor and other Democrats who oppose the House plan have been under assault by a political action committee of road building interests.

Better Roads Ahead sent out mailers targeting House Democrats for opposing the House Republican bill. The one in Pryor's district reads: "Rep. Cherrish Pryor said 'No' to better safety for families and to more Hoosier jobs."

Another reads: "Hoosier roads. Hoosier jobs. Hoosier safety. Denied."

Only a few months ago the group, backed by the International Union of Operating Engineers, was attacking Pence because it said his roads plan was not a long-term solution.

"We are disappointed by the opposition of several Democrats," said Edward Maher, a spokesman for IUOE Local 150 in Merrillville. "Out of all the plans that are out there, the House bill is the only one that provides a long-term funding solution. Relying on user fees like the fuel tax makes the most sense. It has been frozen in time since 2003."

Pryor said she always has had a good relationship with labor and doesn't think the swipes from the IUOE will damage their future work together.

"It's unfortunate they sent (the mailer) out without reaching out to me to ask me about our plan," Pryor said. "But I understand that people are free to express their opinions."

At the same time, Americans for Prosperity, which opposes tax increases, has been running a TV commercial and issuing mailers against the Republican House plan. The organization, funded by the conservative Republican billionaire industrialists David and Charles Koch, says that a $2 billion reserve fund the state is holding is adequate to fix the state's highways and bridges.

"Some lawmakers in Indianapolis would like to raise taxes by HALF A BILLION dollars," reads one flier. "Now is not the time to raise taxes on hard working Hoosiers."

Justin Stevens, a spokesman for AFP, said the opposition to the House plan indicates the organization is founded on ideals rather than political affiliation.

"We don't align ourselves with a particular party but on principle and with taxpayers," he said. Stevens added that "we don't support the House Democrats plan either."

Besides the fuel tax hike, the cigarette tax hike has it's own special interest opponents, including the convenience store industry and tobacco companies.

Maher applauded the political "courage" of lawmakers who would propose a tax hike in an election year, as did Downs at Indiana University-Purdue University Fort Wayne.

"Anytime you say 'Let's raise taxes,' and you know there are groups out there that will oppose you no matter what, it takes courage," Downs said. "But it lessens the blow if you also know there are people out there who say, Let's raise taxes.'"

Call IndyStar reporter John Tuohy at (317) 444-6418. Follow him on Twitter: @john_tuohy.

Call IndyStar reporter Tony Cook at (317) 444-6081. Follow him on Twitter: @indystartony.



