INDIANAPOLIS — Hoosiers who own electric or hybrid vehicles will soon be paying much more in annual registration fees starting Jan. 1, 2024, according to INDOT.

That’s because it’s part of a significant push to change a funding mechanism for a popular infrastructure program statewide. 

Since 2016, nearly 600 Indiana municipalities have benefitted from the Community Crossings Matching Grant Program. Through that program, communities partner with INDOT to match funds for local roads and bridges. Nearly 91 percent of all projects have been pavement projects according to INDOT.

However, INDOT says because nearly 60 percent of program dollars came from the gas tax, it’s not a feasible, long-term solution due to an anticipated 4-5 percent decrease in gasoline consumption nationwide starting in 2025.

”If we see a 4-5 percent decrease, we’ll see a 4-5 percent decrease in that Community Crossings Fund, along with our INDOT funding too,” State Rep. Jim Pressel said.

“We are 100 percent reliant on gasoline use tax and sales taxes, and that is not sustainable,” State Sen. Fady Qaddoura said.

Partly due to the anticipation of fewer gas tax dollars, yearly registration fees for EVs will increase from $150 per year to $221 per year starting in January. For hybrid vehicles, that number will jump from $50 to $74 per year. However, INDOT officials said in a legislative committee meeting Wednesday the increase in those dollars all going towards the Community Crossings program could cause erosion of state funds.

”We’re realizing that adjustments will likely be needed, now what those are to be determined,” Natalie Garrett, INDOT’s strategic communications director, said.

”We need to balance the priority between the Community Crossings program and the other accounts that fund local and state infrastructure needs,” State Sen. Qaddoura said.

At an earlier FIRSST (Funding Indiana’s Roads for a Stronger, Safer Tomorrow) task force meeting this year, INDOT officials said the department could face a $1 billion shortfall by 2040 if nothing changes.

That same committee decided not to move forward with any recommendations Wednesday. However, the chairman says the committee will reexamine the issue next interim.