Indiana cities still waiting for road funding after gas tax suspension

CORYDON, IND. (WDRB) — Indiana's suspension of the state gas tax saved drivers money at the pump, but it has also delayed hundreds of millions of dollars that normally go toward road projects across the state.

Gov. Mike Braun first suspended the 7% gas usage tax April 8 for 30 days. It was extended for another 30 days on May 6, and then again June 3. The suspension is expected to save Hoosiers about 62 cents per gallon.

At the beginning of July, Braun extended the gas tax holiday for the third — and what could be the final — time.

According to Indiana state law, the governor can only declare or extend a gas tax through a 120-day period. Braun would need special legislative approval to extend it again.

This means the gas tax holiday will expire Aug. 6.

The relief comes with a cost. Indiana drivers already pay some of the highest gas taxes in the country, and the state estimates the tax holiday will cut gas tax revenue by about $533 million. That includes roughly $175 million that would have gone to local governments for road maintenance and infrastructure projects.

Drivers said the savings have helped.

"Well it gives everyone a break. I mean gas prices are outrageous," said Indiana driver Troy Lyons.

This leaves local governments wondering, however, when they'll receive the money needed to fund road work.

At the end of June, Braun announced a plan to reimburse local governments for the lost revenue. The Indiana State Budget Agency is expected to approve funding for April and May later this month, with reimbursements expected to be distributed shortly afterward.

Braun said Indiana cites, towns and counties will be made whole by Nov. 1.

Braun is the second Indiana governor to suspend the state's gas tax. Former Gov. Frank O'Bannon temporarily suspended the tax for two months in 2000 as gas prices approached $2 per gallon.

Drivers said every bit of savings has helped stretch their budgets, and that they're likely to take a hit when the gas tax holiday is lifted. Indiana resident Kyle Shezkell said when that 61 cents returns, that's another $20 to fill his truck up.

"It helps in a lot of other areas," Lyons said. "Any little bit in a big family budget, it's a big deal."