News

Local communities get payments after gas tax suspension

WFYI Public Media | By Benjamin Thorp

Published July 22, 2026 at 1:03 PM EDT

Indiana's Board of Finance unanimously approved Gov. Mike Braun's proposal Tuesday to send state funds to local governments to cover the suspension of the gas and excise tax. The move will put $121 million back into the hands of the state's road fund and local governments.

Indiana's Board of Finance unanimously approved Gov. Mike Braun's proposal Tuesday to send state funds to local governments to cover the ongoing suspension of the gas and excise tax.

The decision will send roughly $121 million to cover the tax suspensions made between April and May. The bulk of those funds will reimburse the Motor Vehicle Highway Fund with roughly $38 million going to local governments.

Similar transfer approvals are expected at upcoming meetings to cover the tax suspensions that will carry into early August.

The governor first approved a gas tax suspension in April as an affordability measure to help Hoosiers as energy prices soared due to the war with Iran. Braun has since approved an extension four times, with the final extension expected to end in early August.

Lawmakers, including some republicans, began raising concerns about the cost of the gas tax holiday, especially worrying about how the suspensions might impact local communities that usethose funds for road and infrastructure projects.

Braun has said the suspensions cost the state roughly $140 million each month.

In a statement, the governor said that "today we honored our commitment to ensure that this tax relief for Hoosiers had no adverse effect on the roads and infrastructure in our communities."

Comptroller Elise Nieshalla said that reimbursements will go to local governments in the next two to three days.

Braun has repeatedly said that both the suspensions and the state's ability to make local communities whole have only been possible because of the state's strong economy and balanced budget.

State Treasurer Daniel Elliot echoed that sentiment.

"This critical step ensures that cities, counties, and towns can continue to address infrastructure needs for their communities while taxpayers are given continued relief at the gas pump," he said in a statement. "It's good governance at its best."

All of the reimbursements are expected to be completed in November.

Contact Government Reporter Benjamin Thorp at bthorp@wfyi.org