Indianapolis car owners could pay much higher vehicle registration fees under a new City-County Council proposal to fix roads.
On Monday, June 1, the council will introduce the proposal "to establish a long-term local funding source for infrastructure and position Indianapolis to secure up to $50 million annually in additional state road funding," according to a press release.
Under the plan, car owners who currently pay the county vehicle excise surtax, would pay $100 per year when they register their vehicle. That's up from the minimum of $7.50 now, which is based on 10% of the excise tax.
Truck owners, or those who currently pay the county wheel tax, would pay $240 per year, up from $10 to $40.
The money can only be used to build and fix roads. It cannot be used for other infrastructure needs, according to the proposal.
The plan would help Indianapolis get up to $50 million more each year from the state for road repairs.
“This proposal is about more than a fee change, it is about creating a long-term infrastructure funding strategy for Indianapolis,” City-County Council President Maggie A. Lewis said. “For too long, Indianapolis has relied on short-term and inconsistent funding sources while our infrastructure needs continue to grow. This plan allows us to secure critical state matching dollars, stabilize funding for roads and neighborhood infrastructure, and move from reactive repairs toward a more predictable, long-term investment strategy that residents can see and feel in their communities.”
How the state match works:
The state passed laws in 2025 and 2026 offering Indianapolis extra road money. But the city must match it with local money, according to state law.
Indianapolis must contribute:
- $50 million in 2027
- $70 million in 2028
- $80 million in 2029
- $90 million in 2030
- $100 million starting in 2031
The 2027 match must be entirely new revenue, according to state law.
If the city cannot provide the required match, it loses the state funding forever, the council said.
"We hear daily from our constituents that the condition of city streets is unacceptable," said Assistant Majority Leader Andy Nielsen.
Nielsen said the plan provides certainty Indianapolis needs to secure what he called "a generational investment from the State of Indiana."
The council estimates the new fees would raise about $70.95 million in new transportation revenue in 2027. It would generate about $355.75 million over five years, according to council projections.
When combined with the state match and other projected funding, the plan could support about $855.75 million in new infrastructure investment from 2027 through 2031, the council said.
Why Indianapolis needs more road money
State funding formulas have relied heavily on centerline mileage, according to the council. This measures the length of a roadway regardless of the number of lanes or traffic volume.
A two-lane road and a four-lane road that are the same length count equally. The formula does not account for additional lanes, congestion and maintenance demands in urban areas like Indianapolis, the council said.
Recent changes to property taxes have also reduced projected local property tax revenue growth.
Mayor opposes plan
Mayor Joe Hogsett opposes the proposal, saying residents are already facing financial strain.
Read his full statement below:
"Throughout my tenure as Mayor of Indianapolis, two principles have guided my approach to infrastructure: residents deserve stronger, sustained investment in their roads, and they should not be asked to pay more in taxes. This administration has made a deliberate and sustained commitment to infrastructure, nearly tripling funding for Indianapolis roads over the past decade. Through persistent advocacy at the Statehouse, our administration secured an additional 50 million dollars in state road funding and developed a responsible plan to meet the required match for these state dollars in 2027. We achieved all of this without raising taxes.
Right now, families across our city are already stretched thin by rising costs at the gas pump, in utility bills, at the grocery store, and on everyday essentials. This is not the moment to ask them to shoulder an additional financial burden – especially with a proposal that puts the heaviest burden on those who can least afford it. We owe it to our community members to deliver solutions that invest in infrastructure without placing additional financial strain on hardworking families. It is my firm belief that the proposal announced today is not that solution."
Timeline and next steps:
Indianapolis residents have three opportunities to give feedback on the proposal:
- Administration and Finance Committee: June 9
- Public Works Committee: June 11
- Rules and Public Policy Committee: June 16
The council will vote during the June 16 committee meeting.
If approved, the new fees start January 1, 2027.
