INDIANAPOLIS – As budget-makers look for a way to raise billions for key public works projects, they face an obstacle at the convenience store.

Plans to use a cigarette tax hike to free up money for roads and bridges is hitting resistance from an industry that relies heavily on tobacco sales.

Some leading lawmakers seem ready to raise cigarette taxes to $1 or $1.50 per pack, more than doubling it, as part of a larger plan that also could include interstate tolls and higher gas taxes.

But they face a fight from the influential Indiana Petroleum Marketers and Convenience Store Association, representing thousands of stores for which cigarettes represent half their sales.

Association director Scott Imus called a tax hike “unacceptable” to his members and smokers.

“Is the General Assembly going to pass any other tax increase that would be a 100 percent tax increase or 150 percent increase?” he said. “That’s a remarkably huge percentage increase that falls on a select group of Hoosiers.”

A $1 per pack hike could raise about $300 million a year in new revenue. Millions more could be out there since the state spends almost $600 million in Medicaid dollars on tobacco-related illness, and tax-hike advocates say the increase would curb smoking.

At an annual conference Wednesday sponsored by the law firm Bingham Greenebaum Doll LLP, legislative leaders and Governor-elect Eric Holcomb called for a long-term infrastructure plan that’s “sustainable” – code for revenue streams that would be available for years to come.

Holcomb, for the first time announcing his legislative priorities, called for an infrastructure plan based on data and not politics.

But it was politics that derailed a previous tobacco tax plan, when convenience store owners succeeded in stopping it months before lawmakers faced re-election. That proposal would have poured newly raised tax revenue directly into roads.

Infrastructure experts say the state must spend at least $1 billion a year more on its roads and bridges.

Store owners have said a tax hike will drive smokers across state lines to buy cheaper cigarettes and could result in a boom in black-market cigarette sales. They vigorously dispute the amount of Medicaid savings and new revenue the state would see.

Aiding their cause last time was Gov. Mike Pence, now the vice president-elect, who vowed to block any tax hike. Holcomb has made no such vow and instead has repeated that he is open to all proposals for new revenue for infrastructure.

This version of the cigarette tax hike is less direct, because it goes to Medicaid, freeing up money in the general fund now spent on the healthcare program. The approach may prove more palatable, supporters say, as the state experiences a rise in healthcare spending.

House Transportation Chairman Ed Soliday, R-Valpraiso, has championed efforts to find money for public works.

At Wednesday’s meeting, he dismissed the political clout of the convenience store owners group, calling its arguments against a tax hike “compelling.”

“It’s about, ‘We want to make more money, therefore everything else is subservient to that,’” he said. “That’s OK, that’s business. But it’s not my job to make them rich.”

Maureen Hayden covers the Indiana Statehouse for CNHI’s newspapers and websites. Reach her at mhayden@cnhi.com. Follow her on Twitter @MaureenHayden