DES MOINES – Even as the state of Iowa sits on a multi-billion dollar surplus, the state legislature is still pondering a hike in the state’s fuel tax.
State highways maintained by the Iowa Department of Transportation are financed with funds that are principally derived from vehicle fuel taxes and registration fees.
To offset any possible shortfall in funds needed to maintain Iowa’s roads and bridges, Governor Branstad’s Transportation 2020 Citizen Advisory Commission recommended an increase of 8 to 10 cents in the state’s fuel tax in a report created in 2011.
Iowa’s fuel tax is now 22 cents per gallon and was last raised in 1989.
Dedicated highway user revenue, sometimes called Road Use Tax Fund (RUTF) is collected through the fuel tax and deposited into the Iowa Road Use Tax Fund. No state general fund (i.e., general tax) revenue is used for highway projects in Iowa.
For state fiscal year 2013, receipts into the RUTF and the TIME-21 Fund (a revenue stream which helps to address projected budget shortfalls; created by changing certain vehicle registration fees and schedules, and by increasing trailer and title fees) are estimated to be $1.298 billion, comprised of $443.8 million in fuel taxes, $779 million in various registration fees, plus $75.5 million from miscellaneous other sources.
Iowa Code requires that every five years the Iowa DOT complete a review of the current revenue levels of Iowa’s road use tax fund and the sufficiency of those revenues to meet the construction and maintenance needs of Iowa’s state, city and county roads.
According to a report published in theiowarepublican.com, “those who advocate for the increased (fuel tax), mainly the Iowa Department of Transportation and county engineers, warn that if regular maintenance continues to be delayed, the cost to fix the roads will be exponentially higher that it would be if they are able to be more frequently maintained. The Iowa DOT estimates an annual shortfall of $215 million, and that’s just to address the most critical needs.”
