Indiana officials directed more than $130 million Tuesday to state and local road programs, replacing revenue lost in June amid Gov. Mike Braun’s continued suspension of the state’s gasoline taxes.
The State Board of Finance approved three transfers totaling $130.45 million from the State Highway Fund’s existing balance — not directly from Indiana’s broader budget surplus. It marked the second round of reimbursements related Braun’s temporary gas tax holiday.
Each replaces June revenue that would normally flow to a different road account through Indiana’s gasoline use tax or 36-cent-per-gallon gasoline excise tax.
“I made a commitment that we would provide gas tax relief to Hoosiers without leaving our local communities to foot the bill,” Braun said. “I’m grateful to the Board of Finance for their partnership in once again helping us keep that promise. Right now, local leaders across Indiana are focused on cleaning up from historic storms, repairing damaged infrastructure and helping their neighbors recover, and they can continue to direct their efforts there.”
The largest transfer sent $89.39 million to the Motor Vehicle Highway Account, including $9.65 million in gasoline use-tax revenue and $79.75 million in gasoline excise-tax revenue.
The board separately directed $26.58 million in excise-tax revenue to the Highway, Road and Street Fund and $14.47 million in use-tax revenue to the Local Road and Bridge Matching Fund, which supports matching grants to local governments.
After the money moves through the normal distribution process, State Budget Director Chad Ranney told the Indiana Capital Chronicle, $72.17 million will return to the State Highway Fund for use by the Indiana Department of Transportation.
The remaining roughly $58.3 million is designated for local road funding.
That includes the $14.47 million matching-fund transfer and $43,805,267.02 in direct distributions to counties, cities and towns.
“The board remains committed to good fiscal stewardship and is focused on providing careful oversight as each transfer request is brought forward,” Ranney said. “Our approval today ensures local road funding for this specific period will be distributed to local units of government both accurately and promptly.”
The state comptroller’s office began processing those payments immediately after the board’s vote. Local governments are expected to receive the money within two to three days.
“Our office is committed to processing these reimbursements quickly and with accuracy,” Comptroller Elise Nieshalla said in a statement. “This second distribution reflects the additional days included in the reimbursement window, providing local governments with the full roadway funding they would have collected during that time.”
Reimbursement amounts are calculated using the same statutory formulas as regular monthly Motor Vehicle Highway and Local Road and Street distributions. Other revenue flowing through those accounts will continue on its normal schedule.
Braun first suspended the state’s 7% gasoline use tax in April as fuel prices surged during the war with Iran. He added the gasoline excise tax to the suspension in May and has continued the tax holiday through subsequent energy emergency declarations.
His administration pledged to protect local road budgets from the resulting revenue losses.
The transfers keep scheduled road distributions intact but do not provide new money or address Indiana’s longer-term infrastructure funding needs.
State officials previously projected the months-long tax holiday would reduce revenue for INDOT and local governments by a combined $533 million. That was before Braun initiated a second emergency starting in August.
Another Board of Finance transfer could be considered in September as delayed gas-tax distributions continue.
This story has been updated with additional details and a statement from the Indiana comptroller.
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