Gov. Mike Braun extended two of Indiana’s gas taxes for the second time Wednesday, which will result in about $0.62 per gallon savings at the pump.
Braun announced he will extend the suspension of the 7% gasoline usage tax and the gasoline excise tax, which were set to expire June 7, through July 7.
In June, the gasoline usage tax would’ve been $0.265 per gallon and the gasoline excise tax is currently $0.36 per gallon, according to a statement from the governor’s office. Indiana’s gas prices are currently the lowest in the county at $3.585 per gallon of regular gasoline, according to AAA.
Each month that the gas usage tax is suspended the state loses out on around $50 million in revenue and each month that the gas excise tax is suspended the state doesn’t receive $90 million in revenue, Braun said. The state did not suspend the excise tax the first month, he said.
Since April, and including the new extension for June, the state will miss out on $330 million in revenue.
Since the U.S. and Israel have attacked Iran in February, gas prices have increased steadily as the Strait of Hormuz, a major shipping port globally for oil, has been opened and reopened many times amid the attacks.
“Whatever happens at the federal level, we need to get through that. I think most prior administrations wanted to do what this one is, but it has caused pain onto the affordability issue, that again was created by a prior administration,” Braun said, referring to former President Joe Biden’s policies.
Braun touted that “only well run states” will have the ability to lower gas taxes as the prices continue to rise.
More Top Picks Apple Iphone 17 Vs 17 Pro Vs 17 Pro Max Vs Air
Extending the gas tax holiday is allowed under Indiana’s energy emergency statute, Braun said.
After the COVID-19 pandemic, the Indiana General Assembly limited the governor’s emergency powers during a statewide disaster declaration of 60 days, Braun said. But, under an energy emergency, the governor can declare an emergency up to 120 days before involving the state legislature, he said.
Braun said he hasn’t yet decided if he will extend the gas tax holiday again. He also said he hasn’t talked to state legislators about a potential special session if he’d like to continue the gas tax holiday beyond 120 days to address gas prices.
The Indiana Department of Transportation will “take a hit” with the gas tax holiday, but the department will use its reserves to fund road projects, which won’t be canceled during this time, Braun said.
But, long-term road funding is something that the state legislature will have to discuss, Braun said.
For local governments, Braun said he’s talked with state legislative leaders and determined that “they should be able to be reimbursed fully” from the state for the funding lost amid the gas tax holiday.
“We’ll back fill those lost revenues into locals so that they won’t have to worry about it,” Braun said.
House Speaker Todd Huston, R-Fishers, said in a statement that House Republicans support Braun’s extension of the gas tax suspension because he’s within the 120-day limit of an energy emergency.
“All taxes paid at the pump are used to maintain and improve Indiana’s roads. Heading into the next budget session, we will look at existing resources to ensure we have the road funding necessary to support our infrastructure which Hoosiers and businesses rely on every day,” Huston said.
Senate President Pro Tem Rodric Bray, R-Martinsville, said in a statement that he supports extending the gas tax suspension because high gas prices are a major concern for Hoosiers.
“Since this tax revenue is dedicated to the upkeep of state and local roads, we must continue to be good stewards of our state’s financial resources and find additional efficiencies to ensure we are still able to adequately provide the road infrastructure Hoosiers depend on every day,” Bray said.
Senate Minority Leader Shelli Yoder, D-Bloomington, said in a statement that gas prices have increased because of the “instability in the Middle East and uncertainty in global energy markets.”
“Governor Braun is trying to shield Hoosiers from the consequences of policies he and his political allies support. While temporary relief may help today, Hoosiers deserve more than a band-aid after the damage is done,” Yoder said. “Hoosiers deserve relief from rising gas prices. Families are feeling the impact every time they pull up to the pump, and no one should dismiss that reality.”