Joseph Krist

Publisher

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ROADS AND TAXES

Gov. Mike Braun has extended Indiana’s gas tax holiday for the fourth time. It’s the final 30-day extension Braun can order without approval from the legislature. Each month that the gas and excise tax are paused costs the state roughly $140 million, according to Braun. The governor also announced Tuesday that the state will ensure local governments still receive their portion of the gas and excise taxes as if they were being collected.

The proposal will still need to be approved by the State Board of Finance in late July. Local governments will see the reimbursement by November if approved. Between the localities and the state, the total foregone revenue loss is over $500 million.

In New Hampshire, the governor vetoed a measure which would have helped provide for more funding for the state’s highways by raising the price of tolls for all those without a New Hampshire EZ-Pass.

Georgia saw its gas tax holiday end in June after three months. It is estimated that it cost the state some $220 million in revenues.

I-81 VIADUCT

It’s the kind of project the current federal administration hates as it involves removing highway. At the same time, to have lived through the early years of the project is to understand the long term toll the existence of the viaduct placed on the local community. Efforts to have the viaduct removed – similar to other projects – have been long standing. Once a plan was adopted to do so, the only concern was sustained financing.

Now that the project is at the stage of demolition, funding has been announced. The I-81 Viaduct Project is the largest project ever undertaken by the New York State Department of Transportation. The project will remove a 1.4-mile stretch of elevated highway that has divided the City of Syracuse for decades. I-81 will now go around Syracuse rather than right through the heart of it. That work has been completed.  

QUIET RESURGENCES

Two cities with major roles in their state economies but perennially weak financial operations have recently seen improvement in their situations worth noting. Moody’s has affirmed the Baa3 issuer rating for the City of Hartford, CT. The rating acknowledges the city achieved material financial improvement and stability under state oversight over the past decade. The City’s Board of Education remains a financial problem as a significant projected deficit within the Board of Education (BOE) for fiscal 2026 presents a challenge to the city’s overall financial position. 

The current bond issuance is the city’s first in nearly a decade as it was precluded from issuing debt as part of the terms of it submitting to the oversight of the state’s Municipal Accountability Review Board (MARB). The role of the state in terms of both oversight and funding support is a key foundation supporting the investment grade rating.

Moody’s assigned a stable outlook to the rating. Oversight and funding assistance will continue to play a significant role in maintaining the city’s financial position going forward. The relationship between state and city is seen as collaborative. Without the intervention of the state, much greater negative pressure would have been applied to the rating.

That is not the case with the City of New Orleans. A new mayor took office in January and has implemented management and budget changes which are reported to have halved the anticipated deficit facing the city. While acknowledging improvement the City also knows that additional cuts must be made while the search for new revenues continues.

When the City elected a new mayor last fall, the result was a more business friendly and likely more efficient administration. It seemed that the pieces might be in place to support better collaboration between the state and the city. So, it has been disappointing to see that in spite of the improvement, the political vitriol being directed at the city continues and even increases.

The difference in approaches to financial issues in the two states largest cities is striking. While it has been difficult, Hartford has been supported. The opposite is true with New Orleans.

NUCLEAR

Holtec International announced that it completed all major renovations for its reconstruction of the Palisades plant’s single 800-megawatt reactor in Michigan. Under the Biden administration, the Department of Energy’s Loan Programs Office awarded Holtec a $1.52 billion loan to finance the renovations needed to relicense Palisades’ 54-year-old reactor, previously the oldest in operation in the U.S. fleet. Those loans were continued under the current administration.

It is not clear when actual operations at Palisades will be underway. When completed and operational, Holtec hopes to also develop small modular reactors (SMR) at the site. The company plans to build two of its SMR-300s, 300-megawatt pressurized-water reactors at Palisades. The effort to reopen decommissioned nuclear plants also includes Constellation Energy Generation’s Crane nuclear plant, (aka Three-Mile Island) in Pennsylvania and the Duane Arnold plant in Iowa. Microsoft is financing the Three-Mile Island rehab while Google is financing the effort in Iowa.

ONE MORE WESTERN WATER FIGHT

The U.S. Supreme Court has agreed to hear Nebraska’s lawsuit against Colorado over a proposed canal that would take water out of the South Platte River in Colorado and send it to a reservoir in Nebraska. The Perkins Canal would divert water from the South Platte River near Ovid. It is agreed that Nebraska has the right to do so. 

The South Platte River Compact, ratified by both states and Congress in 1923 authorizes Nebraska to build the canal and grants the right to use the power of eminent domain to acquire land on which to build it. The dispute focuses attention of the complexities of water management especially in Colorado. Already facing issues over use of Colorado River waters, the State of Colorado is fighting to hold onto Platte River water to offset other regional losses.

Nebraska contends that the very system regulating water use in Colorado is itself an obstruction of the Compact. That and actions to support Colorado landholders against eminent domain claims have driven the suit.

OHIO PUBLIC LAND FRACKING

It was a controversial decision to say the least but the State of Ohio decided to allow private energy development firms to lease land in state parks and other state landholdings. The first financial returns are in. Ohio’s new business of leasing about 22,000 acres of its publicly owned lands to the oil and gas industry has generated $314 million. The vast majority of that money comes from one-time provisions in state law such as signing bonuses paid to acquire the leases.

To date, several leases have been awarded but only one is producing revenues. That one producing facility has paid $11.3 million from 20% of royalties on gross production between the first payments in October 2025 and the most recent data from May 2026, according to the Ohio Department of Natural Resources. That’s about $1.4 million per month. By law, at least 30% of the money must go toward capital improvements at the park – things like campsites, lodges and bathrooms. 

It’s important to note that while the initial numbers are impressive, the longer term benefits to the public in general are much less clear. As has been the case for many other fracking projects, the long term economic benefits often underwhelm especially in terms of jobs and local economic growth. The income from many projects go to out of state entities whose interest in local economic development just isn’t there.  

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