City-County Council pitches tax increase to pay for road repairs

Driving the news: Council leaders will introduce a plan at Monday night's meeting to increase the county vehicle excise surtax and wheel tax starting next year.

• The excise surtax — paid by passenger cars, motorcycles and light trucks — would be raised to a flat $100 annual fee paid at registration. The current fee structure averages out to about $20 for most vehicles.
• Larger vehicles like RVs and heavy-duty trucks that pay the county wheel tax would pay a flat annual fee of $240 at registration — up from the current $10-$40 range.
• The anticipated $70 million in revenue from increased fees would go toward roads and allow the city to unlock an additional $50 million annually from the state.

What they're saying: "For too long, Indianapolis has relied on short-term and inconsistent funding sources while our infrastructure needs continue to grow," Council President Maggie Lewis said.

• "This plan allows us to secure critical state matching dollars, stabilize funding for roads … and move from reactive repairs toward a more predictable, long-term investment strategy that residents can see and feel."

Lewis said she knows the timing isn't ideal, as families are already struggling with rising costs of living, but that the city has a deadline to meet to secure the matching dollars offered by the Legislature.

• "If you're already hurting…. A busted tire, a busted rim doesn't help anyone," either, she said.

The other side: More than not ideal, Mayor Joe Hogsett said in a statement that this is not the time to raise taxes. He has been staunchly opposed to raising taxes throughout his tenure and said this proposed hike is unnecessary to achieve the state match.

• "We owe it to our community members to deliver solutions that invest in infrastructure without placing additional financial strain on hardworking families," he said.

State of play: The city's road funding needs have long outpaced the cash it has to put toward them, creating an estimated $1 billion gap.

• For years, city leaders have advocated to the Indiana General Assembly for a change in the state road funding formula, which generally doesn't account for traffic or lane miles.

• In 2025, lawmakers passed a bill allowing the city to tap into $50 million in state funding for its roads — if the city matches it with new road funding of its own.

Earlier this year, the Legislature amended that proposal to require an annual increase in the match, up to $100 million.

Between the lines: The city had already identified $20 million toward that match from existing revenue sources, which are now being directed to roads.

• Combined with the expected $70 million annually from the proposed fee increases and the state's $50 million annual contribution, council leaders say their plan will direct more than $850 million in new funding toward roads between 2027 and 2031.

"We hear daily from our constituents that the condition of city streets is unacceptable," Andy Nielsen, the council's assistant majority leader, said.

• "Our plan provides the certainty Indianapolis needs to secure a generational investment from the state of Indiana while providing additional local resources to address our growing infrastructure backlog."

What's next: The plan will be introduced Monday.

• There will be three opportunities for public comment during council committee meetings next month — the Administration and Finance Committee (June 9), the Public Works Committee (June 11), and the Rules and Public Policy Committee (June 16).
• A final council vote is expected in July.