Relief at the gas pump leaves road funding in question
The Dubois County Council signals its support for the county Highway Department as Indiana’s suspension of gas and excise taxes threatens to cut road funding by as much as $800,000 over four months.
Driving the discussion: County Engineer Levi Leffert submitted a letter outlining the financial impact of the suspended Indiana gas and excise taxes. Preliminary estimates from the Association of Indiana Counties suggest Motor Vehicle Highway and Local Road and Street revenues could drop by approximately 50% during the suspension period.
- The Highway Department averages $345,000 per month in MVH revenue, while the Local Road and Street fund averages $65,500 per month — a combined potential loss of roughly $800,000 over four months if those amounts are cut by 50 percent.
Why it matters: Several road projects have already been awarded to contractors, and some work has already begun. Leffert warned that cutting funding mid-project could result in roadway deterioration, higher future repair costs, and complications for contractors already committed to the work.
Bridging the gap: The council discussed using Local Income Tax funds as a temporary bridge if a shortfall materializes, with the expectation those dollars could be reimbursed if the state restores lost revenue. Councilwoman Deena Lewis noted the county may not fully understand the extent of the shortfall for several more months due to a three-month lag in how gas tax revenues are distributed.
What’s next: Councilman Michael Stallman says state Representative Shane Lindauer indicated any legislative action to backfill lost revenue likely would not occur until the next legislative session in 2027. The council reached a consensus by a show of hands to support temporary funding assistance for the Highway Department if necessary.
Further in:
The Dubois County Council reached a consensus at its regular meeting on Monday to support temporary emergency funding for the county’s highway department, which faces a potential $800,000 revenue shortfall after Indiana suspended its gas and excise taxes.
County Highway Engineer Levi Leffert submitted a letter outlining the financial threat. Council President Mike Kluesner read the letter aloud for the public.
According to Leffert, the suspension of Indiana’s gas and excise taxes could last up to four months.
On April 8, Governor Mike Braun declared an emergency and suspended the gas tax for 30 days. He can do so for up to 120 days without legislative approval, and he has extended that suspension for 30-day increments twice since the original declaration.
Preliminary estimates from the Association of Indiana Counties suggest motor vehicle highway (MHV) and local road and street revenues could drop by roughly 50% during that period.
The Highway Department receives an average of $345,000 per month in MVH revenues. A 50% reduction would bring that down to approximately $172,500 per month, resulting in a potential loss of $690,000 over four months. The Local Road and Street fund receives approximately $65,500 per month, and a similar reduction would add another $133,000 in losses — bringing the combined projected shortfall to around $800,000.
Leffert’s letter noted that all proposed asphalt paving and sealcoat projects have already been awarded to contractors, with some work already underway. Kluesner was direct about how difficult it would be to walk back those commitments.
“When these contractors have a project that’s awarded to them, it’s tough to cut them at the knees and say we don’t have the funding to pay for it,” Kluesner said.
The council discussed using Local Income Tax funds as a bridge to cover any shortfall, with the expectation that those funds could be reimbursed if the state restores the lost revenue. County Auditor Sandy Morton pointed out that the timing of the impact remains uncertain due to a three-month lag in the distribution of gas tax revenues to counties.
“We may not really know where our shortfall is until six months later,” Morton said.
Councilman Alex Hohl added that state projects would also be impacted.
Councilman Michael Stallman said he thought that 40% of the suspended tax revenue flows directly to INDOT, meaning the state is feeling the same pressure. He added that they will likely begin to feel that shortfall in the June payment.
“I think the House Speaker sees it as a problem, so I think that might get some traction,” Stallman said.
That said, Stallman cautioned that any state-level backfill is unlikely to arrive quickly according to his talks with State Representative Shane Lindauer. “If the legislature says, ‘Hey, we want to backfill this,’ it probably won’t occur until next session, sort of next year,” he said, citing a conversation with state Rep. Lindauer.
Councilwoman Meredith Voegerl also noted that several council members have reached out directly to state legislators on the issue and said they should keep that conversation going.
Local cities and towns are also facing similar funding cuts. Gov. Braun has indicated he would be supportive of backfilling the losses from the state’s cash reserves.
