Why It Matters
The extension of fuel tax suspensions in Indiana provides temporary relief to drivers but creates a significant funding gap for state and local infrastructure projects. As the governor utilizes emergency powers to bypass legislative approval, the long-term financial impact on road maintenance remains a central policy debate.
What Happened
Governor Mike Braun extended the suspension of Indiana’s gasoline usage and excise taxes through at least October 6, according to reporting from indianacapitalchronicle.com. The previous emergency order was scheduled to expire on September 5. Without this extension, motorists would have faced an additional 61 cents per gallon in combined excise and usage taxes during the month of September.
Braun initially declared an energy emergency in April, citing the start of the Iran War. He suspended the state’s 37-cent excise tax the following month. Both the excise tax and the 7% gasoline usage tax have remained suspended since May. In August, the governor issued a new energy emergency declaration, referencing the 2022 Russian invasion of Ukraine and Canadian wildfires as contributing factors to fuel market instability.
State law permits the governor to maintain an emergency declaration for up to 120 days without legislative approval. This authority allows Braun to keep the measures in effect through early December. The Indiana Department of Transportation projects that if the suspension continues until December 4, state and local road projects will face combined losses of $1.1 billion.
To mitigate the impact on local governments, Braun ordered his administration to cover losses through the State Highway Fund. However, tapping into the state’s cash reserves requires legislative approval. Lawmakers have shown little interest in convening a special session to authorize the tax suspension. The legislature is scheduled to return for its budget-writing session in January.
By the Numbers
61 cents per gallon — additional cost drivers would have paid in September without the tax suspension
$3.45 per gallon — average price for regular unleaded gasoline in Indiana on Thursday
$4.14 per gallon — national average gasoline price, according to AAA
$1.1 billion — projected combined losses for state and local road projects if suspension lasts through Dec. 4
$5.2 billion — projected state cash reserves by next summer
Zoom Out
The decision to suspend fuel taxes highlights the tension between immediate consumer affordability and long-term infrastructure funding. While Indiana drivers benefit from lower pump prices, the loss of revenue threatens the financial stability of transportation projects. The governor’s reliance on emergency declarations underscores the limitations of executive power in fiscal matters, particularly when legislative bodies are unwilling to convene outside regular sessions.
Nationally, fuel price volatility remains a concern for policymakers and consumers alike. The disparity between Indiana’s average gas price and the national average illustrates how state-level interventions can influence local market conditions. However, the sustainability of such measures depends on available cash reserves and legislative support.
What’s Next
The governor can maintain the emergency declaration through early December, but any extension beyond that period will require legislative action. Lawmakers are expected to address the issue during their budget-writing session in January. Until then, the state must rely on existing cash reserves and the State Highway Fund to manage the financial shortfall.
Braun emphasized the importance of keeping fuel costs low for residents. “Affordability has been a top priority,” Braun told the Indiana Capital Chronicle. “My gas tax suspensions have delivered the least expensive gas in America for Hoosier families.” He added that the current timeline allows the administration to wait until lawmakers return. “That gets us close enough to a legislative session where we can look at it more seriously.”