Big Push To Raise Iowa's Fuel Tax

Iowa Farm Scene

Increased revenue is needed to repair roads and bridges, say backers of proposed gas tax hike.

Published on: March 5, 2013
Paul Trombino, director of the Iowa Department of Transportation, says the department has taken steps to become more efficient and is taking even more steps to hold spending in line. But there is no other source for revenue to make these needed repairs to roads and bridges, he notes, if new revenue from a gas tax increase doesn't come in -- other than cutting back on the road work the Iowa DOT is contracting for currently.

Following are some additional reasons to support an increase in Iowa's fuel tax as cited by ISA, ICGA, Farm Bureau and others:

* The Iowa Road Use Tax Fund is constitutionally protected and is used only to maintain and improve roads and bridges. An increase in the fuel tax is earmarked for that purpose.

* Rural roads make up nearly 80% of the state's 114,000 mile road system and those roads are essential to agriculture and crop production. Having good farm-to-market roads is vital to the state of Iowa's economic health. For example, Iowa exports one-half of the soybeans produced in the state. Once harvested, the crop needs good roads and bridges to reach markets.

* The state fuel tax hasn't been raised since 1989 and construction and repair costs have more than doubled since then, creating a shortfall in road and bridge repair budgets.

* Since Iowa is crossed by two major interstate highways, out-of-state drivers will pay an estimated 20% of the increase in the fuel tax collection.

* The benefits would far outweigh the cost per driver. An increase of 10 cents a gallon in the fuel tax would cost a 15,000 mile-per-year driver only about $68 more per year. The cost of vehicle repairs caused by poor quality roads is far greater than that.

Meanwhile, the anti-fuel tax increase lobby is also putting their message across. They point out that the federal excise tax on gasoline is now 18.4 cents per gallon and the Iowa tax is 22 cents, which is a total of 40.4 cents Iowans are already paying in gas tax. The anti-fuel tax increase lobby says "That's enough!" However, promoters of the proposed gas tax increase point out that all of Iowa's neighboring states except Missouri have higher fuel taxes.

Scott Newhard, executive vice president and chief lobbyist for the Associated General Contractors of Iowa, bristles at the mention of the anti-fuel tax campaign. "What is concerning to us is the out-of-state groups coming in here with their own agendas," he says, referring to Americans For Prosperity, which launched a "No Gas Tax Increase In Iowa" campaign last month. The campaign includes an electronic petition for people to sign opposing any fuel tax increase and pre-drafted letters on its website. Americans For Prosperity is based in Washington, D.C. but has local chapters in different states.

Fuel tax is a dedicated user fee that was originally established to pay for roads and bridges
The voters of Iowa 70 years ago approved a constitutional amendment that earmarked revenue from taxes on motor vehicles and fuel exclusively for road construction and maintenance. That money can't be siphoned off to be spent on any other state needs.

The last time Iowa raised the gas tax was in 1989, and in the intervening 24 years, overall traffic in the state has increased 36%; heavy truck traffic has increased 42%. Meanwhile, the need for road and bridge construction and repair has surpassed the available revenue. Inflation has driven up the cost of road construction and maintenance, and the problem is aggravated also by the increasing fuel efficiency of vehicles. Drivers travel more miles per gallon, creating wear and tear on roads and bridges while paying the same or less in gas taxes.

Based on Federal Highway Administration data, Iowa now ranks 38th among the 50 states in the condition of rural interstate highways and 34th in bridges. Proponents of the gas tax increase note that Iowans demand a modern system of roads and bridges. That system should be well-maintained, safe and able to handle traffic demand. The state gas tax is a special fee created for that purpose and it is falling short of the need. They say drivers who use Iowa's road system should expect to pay their fair share for the construction and maintenance of that system.