Indiana’s State Board of Finance approved nearly $103 million to replace August road revenue lost during the state’s gas-tax holiday, including $19.1 million for counties, cities and towns.
The fourth reimbursement covers Aug. 1 through Aug. 31 and directs $102,990,085.62 to the Motor Vehicle Highway Fund, Local Road and Street Fund and Local Road and Bridge Matching Fund, according to Tuesday’s approval. Local governments are scheduled to receive $19,129,920.09 of that total.
The payment is designed to keep road budgets whole while Gov. Mike Braun’s emergency orders suspend the Gasoline Use Tax and Gasoline Excise Tax. The Department of Revenue says the current suspension runs through Nov. 4 and follows earlier consecutive suspensions. Both taxes are collected from distributors rather than as separate line items charged directly at retail pumps.
Reimbursement prevents an immediate shortfall for local paving, bridge work and routine maintenance, but it does not eliminate the fiscal cost. The money is replaced from state resources, shifting the burden away from fuel-tax collections and onto reserves or other available balances. State officials have said they intend to preserve scheduled transportation work while lawmakers address replacement funding.
The latest action follows earlier transfers. The first reimbursement, approved in July for collections suspended from April 8 through May 31, totaled $121.2 million, including $37.8 million for local units. Subsequent monthly approvals show the holiday’s transportation cost accumulating even as each distribution protects individual local budgets.
Indiana’s road-distribution system is more complex than one monthly gasoline tax. A comptroller memo says 23 revenue sources support the Motor Vehicle Highway distribution, with the suspended gasoline-use and gasoline-excise taxes accounting for about half of that account. The Local Road and Street distribution draws from 14 sources; only the gasoline-excise portion was suspended, while special-fuel and other revenue continued.
Tuesday’s action also completed the annual transfer of the first $70 million in gasoline-excise collections to the State Highway Road Construction and Improvement Fund. Ordinarily that transfer lowers August distributions to local governments. Because the holiday delayed July collections, the adjustment appeared later than usual, according to the state’s distribution guidance.
Local payments follow existing statutory formulas rather than new discretionary grants. The comptroller’s reimbursement guidance says the State Budget Agency calculates the statewide revenue impact using Revenue Department data, the finance board approves the transfer and the comptroller distributes money through the regular Motor Vehicle Highway and Local Road and Street formulas. Regular monthly distributions continue separately.
For local governments, the approval provides near-term budget certainty. For the state, the unresolved question is cumulative cost: every extension adds another month of foregone fuel-tax revenue that must be replaced if officials continue promising uninterrupted road funding. A complete assessment will require the final reimbursement total, the reserve source used and confirmation that planned fiscal 2027 projects remain fully financed.
