Huston: Statehouse Mandarins Push a Gas Tax

January 10, 2017

by Tom Charles Huston

The members of the General Assembly have barely warmed their seats and the fury is already reaching pitched levels on social media. It is over the proposal by the new Republican governor (washed into office by the Trump landslide) and the Republican legislative leadership (known affectionately as the Mandarins) to hike gasoline taxes and impose a number of new fees designed to raise an additional $1.2 billion a year for highway and bridge construction and maintenance. A similar proposal in the last session of the legislature was sidelined after Gov. Mike Pence refused to go along with the tax-hiking plan.

Indiana is not alone in this quest for new sources of revenue to fund transportation needs. Reid Wilson at The Hill reports that a number of traditional red states, including Tennessee, Arizona and Missouri, are also considering raising gas taxes.

Insofar as I can tell, few Hoosiers doubt that additional spending on roads and bridges is necessary, and except for hardcore libertarians they don’t dispute it is the responsibility of the legislature to provide the means to meet the need. The issue is how to pay for it.

The Mandarins, who make the decisions on what level of pain ought to be inflicted on Hoosier taxpayers, have already decided to raise taxes, and not even Zeus launching a thunder bolt at the Statehouse from his home base on Mount Olympus would dissuade them.

Their critics, on the other hand, believe that instead of resorting at first blush to a tax increase, the legislature should make some effort to prioritize the expenditure of current revenues and among other policy shifts get the state out of the business of paying off special interests and picking winners in the guise of economic development. This, of course, is regarded by the Mandarins not only as heresy and reactionary nonsense but as the most egregious form of presumptuousness since these hayseeds obviously don’t understand the finer points of the budgeting process.

I am struck at the number of people commenting on the Facebook sites of Republican legislators who fail to understand that the budget adopted by the legislature in April will be framed by the Select among the Mandarins, and that most legislators won’t have the slightest idea what they are voting on when the budget comes up on the last day of the session. The one thing you can count on, however, is that whatever the final budget numbers are and however the revenue stream is adjusted to place it in balance, the special interests will get what they want. You don’t win “Legislator of the Year” awards by whacking away at revenue streams that fuel the pet projects of the Chamber of Commerce, the Farm Bureau and the Indiana Bankers Association. Pissing off the Indianapolis Star is not what Mandarins do.

I don’t like the mix of taxes the legislature has fashioned which in my view impose a disproportionate burden on lower-income Hoosiers, and I have opposed the continuing shift of the tax burden from businesses to individuals. On the other hand, with property tax relief I think the overall tax burden on Hoosiers is not excessive and in some instances is less than what is reasonably required for state and local governments to do the things that need to be done. This is certainly a minority view among those who generally share my political dispositions, but government exists to perform certain vital functions and doing so requires revenue and, thus, taxes.

Everyone has a view of what the budget priorities ought to be and whether some programs are beyond the scope of what our state government is required to do and accordingly should be eliminated. People of good will are going to differ on these matters, and my inclination has always been to cut my fellow conservative some slack on the details. The one thing, however, that has always stuck in my throat is the devotion of the Mandarins to Crony Capitalism. They are incorrigible, and even such common-sense fiscal conservatives (Mike Pence) once in office fall victim to the lure of picking winners and paying off special interests. It is one thing to pay your fair share of taxes; it something else entirely to have those taxes transferred into the pockets of Mel Simon, Jim Irsay and every corporate supplicant that hires a wired lobbyist.

As it is, I favor a long-term (e.g., 20-year) solution to our transportation needs, and I accept that some increase in taxes is necessary to achieve that objective. At the same time, I am hopeful that the Indiana Policy Review Foundation and other advocates of frugal government will keep the heat on the Mandarins. Making their lives uncomfortable is one of the best returns on our “investment” as taxpayers.

Tom Charles Huston, A.B., J.D., an adjunct scholar of the Indiana Policy Review and a former associate counsel to the president of the United States, is an Indianapolis developer.



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