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Drivers making budget cuts as Indiana raises its gas tax yet again

Taxes on a gallon of gas in Indiana went up six cents from June's record high of 56 cents.

INDIANAPOLIS — The Fourth of July holiday weekend is here, but with gas prices so high, few people feel like celebrating.

"Ridiculous. I don't go anywhere anymore. Kids don't like to hear it, sorry can't go. I usually help people, give them rides and, sorry I can't help you. It's hard," said Lenice Bailey of Indianapolis. 

Bailey said paying so much at the pump has her thinking lately about any way she can save money. 

"I think I'm going to have to get a job working from home," Bailey said. "I'm serious, because it's a lot. I never thought I'd see it get this high."

Those high prices are likely going to rise as Indiana raises its gas tax once again.

Now, Bailey and many others are making cuts to summertime budgets.

"Cut back on food, definitely. Cut back on entertainment, a lot of things," Bailey said. 

RELATED: Average gas price falls, but stays above $5 in Indiana

"I had to cut back on food, I've had to cut back on clothing. I've had to consider, if I've had an issue with my car, I've had to consider my savings, everything," said Leroy Baker of Indianapolis. “Well, you have to because with the food prices been as high as they are right now and everything else being as high as it is right now, you have to at least consider it."

"Going to a lot of festivals and fairs around the summertime, I don't see myself being able to do that. Gas to travel, because it could be two to three counties away, or money to spend on food and all the other things you buy," Bailey said. "I was supposed to go on a trip to Chicago and we had to cancel because we couldn't afford it."

Hoosiers now pay 62 cents per gallon in taxes at the pump. That's up from June's record-high of 56 cents per gallon. 

Where does that 62-cent tax come from? Indiana has two taxes on gasoline.  

RELATED: Indiana gas tax increases to record high in July

The first is a tax directed to infrastructure projects. The road projects tax was at 32 cents a gallon, but increased another penny in July to 33 cents. The second tax is a 7% sales tax calculated out monthly. As of July 1, that tax increased up to 29 cents per gallon, bringing the state's total tax on gas to 62 cents per gallon.

The 29-cents-per-gallon sales tax increased an additional five cents from June. According to data from the state, it's nearly triple the rate it was two years ago. In July 2020, the state reported that tax was only 10 cents per gallon. 

RELATED: How much money would drivers save with a gas tax holiday?

That's leaving drivers paying more at the pump at a time when gas prices overall are already sky high over the war between Russia and Ukraine.

"I think it's a bit high. I think maybe after the war with Ukraine is over with, I think it might drop a little bit," Baker said. "Until that crisis is over, I think it's going to stay high."

With Hoosiers feeling the pinch at the pump, Bailey said she wants to see lawmakers cut down on these rising gas taxes to give drivers some needed relief.

"Please lower the tax on the gas. We need it bad, everybody does," Bailey said. "Please."

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