November 23, 2014

Iowa vehicle fees, not gas taxes, now largest share of state road budget

A spokesman for the Iowa Good Roads Association warns if lawmakers fail to raise the state gas tax, there’s a “fiscal cliff” ahead in Iowa’s budget for maintaining roads and bridges. 

State officials say the budget for fixing and building roads and bridges is already $215 million short. The potential for cuts in federal spending on roads and the continuing decline in state fuel tax collections means there’s a danger zone ahead according to Dave Scott of the Iowa Good Roads Association.

“If you look at our road use tax fund, we have our own ‘fiscal cliff’ coming in 2015,” Scott says. “I mean, it just drops off.”

The director of the Iowa Department of Transportation told lawmakers today that state fuel taxes or “user fees” are a significantly shrinking share of the budget for maintaining Iowa’s roads and bridges. About $440 million in gas taxes will be paid to the state this year, but Iowa vehicle owners will pay $780 million to the state for vehicle licenses and new car fees.

Iowa Department of Transportation director Paul Trombino said that means Iowa citizens pay a “far larger burden” to maintain the roads than the traffic that passes through on Iowa’s two major interstates. But Trombino’s not directly calling on legislators to raise the gas tax.

“That’s one reason to potentially look at it, if somebody were to choose to,” Trombino told reporters after his appearance before the House Transportation Committee.

The lobbyist for the Iowa Good Roads Association is choosing to highlight that stat.

“People are just shocked when they look at it,” Scott said this afternoon. “We’re getting more for the registration fees than the gas tax?”

Scott said lawmakers “can’t keep kicking the can down the road” when it comes to delaying an increase in the gas tax. Just 34 percent of Iowa’s budget for roads and bridges comes from the gas tax. In most other states, over half and in some cases 70 percent of their road budget comes from gas taxes.