Braun Extends Indiana Gas Tax Holiday Under Newly Declared Energy Emergency

Indiana Gov. Mike Braun has extended the state's gas tax holiday again, declaring a new energy emergency one day before the suspension was due to lapse. Braun announced the decision to reporters on Wednesday afternoon.

Braun began the holiday in April by waiving the state gas tax. In May, the state's excise tax on fuel was added, cutting roughly sixty cents from the price of each gallon. Braun had indicated that the relief could not continue past Thursday without approval from the legislature.

The first emergency was tied to the war with Iran and allowed the governor to suspend the taxes for four months. The new declaration points to different causes: disruptions to global oil supplies from the ongoing conflict in Ukraine and wildfires in Canada. "This new energy emergency is prompted by energy disruptions to global oil shipping lanes in recent weeks," Braun said. The governor added that the disruptions have pushed gas prices for Hoosiers "outside the norm of standard economic conditions."

Because the emergency is new, it starts a fresh clock and gives the governor a second 120-day window to pause the taxes. Attorney General Todd Rokita approved the move in a statement, writing that nothing in Indiana's emergency powers statutes bars a governor from declaring separate emergencies based on different factors. Rokita said it is within the governor's authority to offer temporary relief at the pump "based upon changed conditions."

The suspension has raised concerns among lawmakers about its cost and its effect on local governments, since the gas tax helps pay for local infrastructure projects. Braun said local governments will be reimbursed for their share, and the Indiana Board of Finance approved the first portion of that money last month. Even so, the state has spent roughly half a billion dollars on lower pump prices so far, at about $140 million for each month the taxes are suspended.

Braun defended the expense, saying gas is a cost that reaches the average Hoosier every week and is a must-have item in many household budgets. The governor called it the best way to help the people who need it most. Braun also said Indiana's budget, which brings in about $2 billion in annual surplus, can absorb the cost without affecting other possible spending, such as childcare.

Several lawmakers backed the extension. Sen. Ryan Mishler, R-Mishawaka, said the financial hardship of high gas prices is understood and that officials should keep costs as reasonable as possible. House Speaker Todd Huston, R-Fishers, said that as work begins on the next state budget, the intent is to work with the governor and the Senate to identify existing resources and keep making infrastructure investments.

Rep. Gregory Porter, D-Indianapolis, said Wednesday that he respects the decision but argued it overlooks the main driver of higher gas prices, which he identified as President Trump's ongoing war in Iran. "Every day this war continues and we keep our gas tax suspended to protect Hoosiers, that's money we are losing for our roads, our schools our healthcare and more," Porter said. He added that Indiana cannot be on the hook for "Washington, D.C.'s reckless actions forever."

Braun dismissed the Democratic criticism as a deflection. "We ought to count our blessings that as a state we're one of a few that can look at lighter taxation," the governor told reporters. The extended gas tax holiday is scheduled to end on September 5.