Indiana approves $130M to replace road funding lost during gas tax holiday

The Indiana State Board of Finance has unanimously approved more than $130 million in reimbursements to state and local road programs. This funding is intended to replace revenue lost during the gasoline tax suspension implemented by Governor Mike Braun.

The $130.45 million transfer will be drawn from the State Highway Fund rather than the state’s broader budget surplus. This marks the second round of reimbursements following the June tax holiday. The largest portion, $89.39 million, is directed to the Motor Vehicle Highway Account, while other funds are allocated to the Highway, Road and Street Fund and the Local Road and Bridge Matching Fund.

Governor Braun stated that the measure ensures gas tax relief for residents without forcing local communities to cover the funding gap. The State Comptroller’s Office is expected to distribute approximately $43.8 million to counties, cities, and towns over the coming week. These funds arrive as local leaders manage infrastructure repairs following recent severe weather and flooding in the state.