Indiana will once again receive a gas tax suspension for thirty days, part of a gas tax holiday instituted by Gov. Mike Braun this spring.
“Global disruptions are still there, but I expect that could gyrate between now and the midterms,” Braun told reporters Monday. “So I am extending the emergency for another month.”
Braun initially declared an energy emergency in April, citing the ongoing war with Iran, an emergency order he kept in place for the full 120-day window. When that expired, he declared a second emergency in August, pointing that time to conflict in Ukraine and the Canadian wildfires.
This extension will take the state through October and leave the Governor with one final possible extension through November, after which he would either need to end the gas tax holiday or declare a new state of emergency.
Diesel relief for farmers
Gov. Braun also added a new provision to his gas tax extension announcement Wednesday; it eases restrictions on the use of dyed diesel by farmers. The state’s gas tax holiday so far has not extended to diesel.
Texas Gov. Greg Abbott made a similar move earlier this week, declaring a state of emergency to give relief to farmers and reduce shipping costs.
Dyed diesel is the same as regular diesel but is colored and exempt from federal and state taxes, and is generally banned on public roads. Indiana farmers will now be able to use it for any farm-related activity.
“It's going to help farmers in a big way, and it'll take very little away from our road and bridges revenues that go into that area,” Braun said.
He estimated the cost to the state would be between one and three million every month. The relief will be reconsidered in November along with the gas tax holiday.
Braun’s move comes after over fifty lawmakers sent a letter to the governor earlier this week urging relief for farmers after diesel reached nearly $7 per gallon in some parts of the state.
“Agriculture, through exports and food production, is a longstanding pillar of our economy, and it is detrimental if farmers cannot afford to harvest their crops," Rep. Jim Pressel (R-Rolling Prairie) said in a letter to the governor.
The rising costs of diesel aren’t just being felt in Indiana. President Donald Trump is reportedly considering a diesel export ban to help bring down prices.
Braun said that kind of movement at the federal level seems unlikely.
“That would take 60 senators to agree to,” he said. “I was there for six years. That happens very seldom.”
The state’s Democratic leadership applauded Braun's decision to provide relief to farmers but, as they have done throughout the gas tax holiday, still laid the rising fuel prices at the feet of President Trump and the Republican Party.
“Farmers deserve real, lasting solutions, and Indiana Republicans should be demanding them from Washington,” Minority Leader Phil GiaQuinta (D-Fort Wayne) said in a statement.
Indiana’s strong fiscal state
Braun said the gas tax holiday has delivered over one billion dollars of savings to state residents, something that has only been possible because of the strong financial position the state finds itself in.
“We're doing this out of $2 billion of extra reserves that we created in one year,” he said. “Everybody should be applauding that.”
Braun has repeatedly said that gas taxes are earning the state less every year, as more fuel-efficient vehicles come to the market. That’s something he has said the legislature will need to address.
But Braun did not answer whether gas taxes could be gone forever.
“That'll be a big discussion, but we'll need to have it,” he said.
Cities and counties use gas tax money to fund road projects. During the suspension, Gov. Braun has started to make good that lost funding for municipalities.
Contact Government Reporter Benjamin Thorp at bthorp@wfyi.org
