New gas tax takes effect July 1st

INDIANAPOLIS, Ind—Starting July 1, Indiana drivers will have to pay more at the pump.

That’s when a 10-cent per gallon increase in Indiana’s gas tax will take effect. The hike is part of a bill that passed earlier this year to help fund a 20-year road improvement plan.

“This is game changing money for cities and towns,” Jennifer Simmons with Aim Indiana said.

Aim is a municipal growth and leadership organization. Simmons says the tax increase means that over time cities and municipalities will see about $340 million in new money for their local road and street funds.

“That’s about 45 percent more in local road and street and motor vehicle highway funding than they were seeing before,” she said.

However it may not be until 2018, or 2019 that communities start to reap the benefits of the tax.

“Over the next 2-3 years, you’re really going to see that activity,” Simmons said.

There are other items in this hike that also go into effect July 1st , including things likea  special fuel tax and a wheel tax (in cities/municipalities that qualify). However at this point it is unclear how much reveue those taxes will generate for each city or municipality.

A spokesperson for INDOT says the organization will be examining their road construction plans to reflect the new funding. More details on their plans are expected  after the holiday.