PERU — Miami County Highway Superintendent Chad Watson breathed a sigh of relief last week when the State Board of Finance approved distributing $37.8 million to reimburse local governments for the lost tax revenue from April and May.
Gov. Mike Braun first suspended the gas tax in April following skyrocketing oil prices in February, when the U.S. launched attacks on Iran. The move has saved Hoosiers around 60 cents per gallon at the pump.
It also cost cities, counties and towns around $170 million in road funding needed for repairs and maintenance and caused some communities, including Miami County, to at least temporarily pause work on projects this year.
The suspension remains in effect until Aug. 6, after which the state legislature would have to be called into a special session to consider whether to continue the holiday.
Following last week’s initial distribution, the state plans to continue issuing refunds for other months impacted by the gas tax holiday. That’s eased the concern for some, but others are still nervous about over-committing to projects or big purchases.
A Miami County highway crew chip-and-seals a road on July 30, 2026. The State Board of Finance must approve every refund distribution, and all reimbursements are expected to be received by November.
But Mike Sharp, the highway superintendent in Wayne County, said receiving reimbursements in late fall would be a problem. That’s because the road season winds down in September, and reimbursements coming after that won’t help counties pay for this year’s planned projects.
“We'll just kind of have to wait and see how the money rolls in to know whether we stay on top of it,” Sharp said.
Watson from Miami County said they received $233,000 last week, but it remains to be seen when — and how much — the state will approve for future reimbursements. Without a guarantee those refunds will be approved, he doesn’t feel comfortable spending money he hasn’t yet received.
“It just makes planning jobs a nightmare because you just don't know,” he said. “It's very much just shooting from the hip.”
Both Sharp and Watson said if they don’t get the refunds in time this year and have to delay projects, they’ll hold on to the money and budget a larger road repair season in 2027.
But Todd Listerman, the Dearborn County highway engineer, said he took the governor’s pledge in April to backfill local road funding at face value.
Now that the county received its initial $214,400 refund, Listerman is fully confident they’ll get their funding on time and plans to operate as usual.
“Really, this has had no effect at all at our county highway department,” he said.
In Cass County, the highway department’s $256,600 reimbursement arrived just in time for road projects to continue as scheduled, Superintendent Jim Smith said.
“It’s been great as a driver to see the lower gas prices, but in my day job, it's been a concern ever since the tax holiday was announced,” he said. “So I'm thankful for the governor … to make good on this.”
This article first appeared on FPI News and is republished here under a Creative Commons Attribution-NoDerivatives 4.0 International License.
