Indiana Governor Mike Braun has announced an extension of the state’s gas tax holiday, continuing relief for Hoosier motorists by suspending the 7% Gasoline Usage Tax and the $0.36 per gallon Gasoline Excise Tax through the end of July 2026. This move effectively reduces gas prices by over 62 cents per gallon, making Indiana’s fuel prices the lowest in the nation, with an average price of $3.58 per gallon according to AAA.
Economic Relief for Families
Governor Braun emphasized the importance of affordability for Indiana families, stating, “Indiana has the cheapest gas in the country because we are using every tool in the toolbox to save Hoosier families money.” He highlighted that the tax cuts serve as an economic shield against inflationary pressures inherited from the federal level, impacting not only gas prices but also property taxes, utility rates, and healthcare costs.
The state is able to absorb the fiscal impact of the tax suspension, estimated at $50 million per month for the usage tax and $90 million per month for the excise tax, due to a resurgent state treasury. State revenues have outperformed budget forecasts, allowing for continued support of local governments, which typically receive 30% to 35% of these tax revenues for road maintenance.
Infrastructure and Economic Growth
While the tax holiday temporarily reduces infrastructure funds, Governor Braun assured that local governments will be fully reimbursed through state surpluses. He credited operational overhauls and Indiana’s aggressive economic growth for generating the necessary revenue to support these measures. Braun noted that Indiana’s economy is growing significantly faster than neighboring states, attracting businesses and increasing wages.
The Indiana Department of Transportation and local entities will utilize reserves and state cash flows to prevent project cancellations. However, Braun acknowledged the need for a long-term solution to road funding, as gas tax revenues begin to flatten. The emergency tax suspension is executed under Indiana’s energy emergency statute, granting the executive branch localized authority for up to 120 days.
Governor Braun left open the possibility of further evaluations ahead of the upcoming legislative budget session, indicating that the tax holiday could be extended further if necessary.
Original reporting: WOWO News/Talk (Fort Wayne) — read the source article.
