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Gregg pitches an end to gas tax

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Democrat - John Gregg said Wednesday he wants to eliminate the sales tax on gasoline - purchases but his plan would rely on finding substantial savings in other areas - of state government. - PHOTO BY TIMOTHY COX, THE STATEHOUSE FILE.
  • Photo by Timothy Cox, The Statehouse File.
  • DemocratJohn Gregg said Wednesday he wants to eliminate the sales tax on gasolinepurchases but his plan would rely on finding substantial savings in other areasof state government.

By Timothy Cox
The Statehouse File

Former House Speaker John Gregg, a Democrat, is promising Hoosiers he will eliminate the sales tax on gas purchases if he beats Republican U.S. Congressman Mike Pence in the race for governor.

The plan, part of what he's calling Hoosier Handshake, would cost the state — and, he said, save taxpayers — about $540 million annually. Gregg said the state could afford to eliminate the tax by making cuts and finding savings in other programs.

"This is money that isn't going into corporate headquarters in other states or other countries. It's staying in the pockets of Hoosiers and Hoosier businesses right here in Indiana, and if that's a savings, that's promoting growth," Gregg said. "If that's promoting growth, it's creating jobs, and jobs is what this is about."

According to Gregg, Hoosiers would use the money they save to pay for products from other companies, which could lead to increased production and a need for more workers. Gregg said the money would also help Hoosiers who may not always have enough gas to drive to work.

Pete Seat, spokesman for the Indiana Republican Party, criticized Gregg for introducing a plan without the funds to implement it.

"Speaker John Gregg offered a typical blast from the past policy proposal that spends money we don't have," Seat said. "Oh, but don't worry, he promises to figure out how to pay for his idea at some to be determined time. Nice try."

And Pence spokesman Matt Lloyd said the Republican "is not opposed to lifting the sales tax on gasoline."

"But he believes that it is no substitute for broad-based tax reform and the kind of energy policies that will reduce prices at the pump for Hoosiers and lessen our dependence on foreign oil," Lloyd said.

Gregg said his plan to eliminate the sales tax on gas is expected to save every Hoosier family between $261 and $522 each year.

"Unlike my opponent, Congressman Pence, who has never had to balance a budget before, I know what it's like. To pay for this, we're going to conduct a top-to-bottom efficiency review of the state's entire accountability and responsibility," Gregg said.

Thirteen other states have implemented similar audits and found ways to save between 5 percent and 6 percent of their general funds. Indiana currently spends more than $14 billion annually. Saving 5 percent means the state would have $700 million annually to spend on the gas tax and other programs.

Gov. Mitch Daniels has conducted financial reviews of state departments throughout his two terms and has already cut agency spending. Gregg's estimates assume experiences in other states and the math for Indiana will work only if he can find enough government spending to cut.

"We are convinced that this will give us the savings to pay for this," Gregg said. "Other states have done this, and we're convinced that's how we'll be able to pay for it."

Before the sales tax elimination can commence, legislators will have to vote on a bill that will make it possible. Gregg plans on meeting with legislators the day after the November general election.

"Gas isn't a luxury and Hoosier families are struggling and they need relief now," he said.

Timothy Cox is a reporter for TheStatehouseFile.com, a news service powered by Franklin College journalism students and faculty.

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