Gov. Mike Braun has directed his administration to make local governments whole amid the state’s gas tax holiday.
The Office of Management and Budget Secretary Lisa Hershman will coordinate with the State Budget Agency and Department of Revenue to calculate how much money is needed to make local governments whole, according to a release from the state.
Chad Ranney, the state budget director, will bring the formal request to transfer funds from the State Highway Fund for April and May to the Board of Finance on July 21. If the transfer is approved, local governments would receive funds from the comptroller within five to seven business days, according to a release from the state.
If needed, similar requests will be made at the August and September Board of Finance meetings. Local governments can expect to be made whole no later than November 1, according to the release.
“This is only possible because Hoosiers demand commonsense fiscal management, and we’ve delivered,” Braun said in the release. “We are running government more efficiently and as a result, we have the resources to offer tax relief while supporting local partners.”
Comptroller Elise Nieshalla said the office aims to partner with local governments and distribute the funds “accurately and without delay.”
“We understand the importance of timely revenue distributions, and we remain focused on delivering taxpayer dollars with the transparency, accountability and fiscal stewardship Hoosiers expect,” Nieshalla said.
State Treasurer Daniel Elliott said affordability and lowering costs for Hoosiers while supporting local governments have been his focus while in office. Elliott said he supports the governor’s decision to suspend the gas tax.
“This proposal adds to that decision by making local governments whole without negatively affecting Hoosiers. It’s a great example of what sound fiscal policies can accomplish,” Elliott said.
Braun extended two gas taxes for the second time June 3, 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 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, which saves those at the pump more than $0.62 per gallon, according to a statement from the governor’s office. Indiana’s gas prices are the lowest in the country at $3.585 per gallon of regular gasoline, according to AAA.
Each month that the gas usage tax is suspended, the state doesn’t receive $50 million in revenue, and each month that the gas excise tax is suspended, the state doesn’t receive $90 million in revenue, Braun previously said. The state did not suspend the excise tax in the first month, he said.
Since April, including the new extension for June, the state will miss out on $330 million in revenue.
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Taking aim at former President Joe Biden’s administration, Braun previously said “the burden we’ve been shouldering for nearly a year and a half came from the prior administration when prices went up over those three years 25%.”
Since the U.S. and Israel attacked Iran in February, gas prices have increased 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 previously said.
Braun touted that “only well-run states” will have the ability to lower gas taxes as the prices continue to rise.
Extending the gas tax holiday is allowed under Indiana’s energy emergency statute, Braun previously said.
After the COVID-19 pandemic, the Indiana General Assembly limited the governor’s emergency powers during a statewide disaster declaration to 60 days, Braun previously said. But, under an energy emergency, the governor can declare an emergency up to 120 days before involving the state legislature, he previously said.
Braun previously 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 previously said.
But long-term road funding is something that the state legislature will have to discuss, Braun previously said.