DOT Planner Stuart Anderson says traffic volume is down as many businesses are closed by the pandemic and people are staying home. He says they are seeing about a 40% reduction in travel through their automated traffic recorders. Less travel leads to a drop in road use taxes that are used for construction by the state, cities, and counties.
Anderson says there are fewer gallons of gas sold and fewer dollars collected in gas tax. There are also fewer vehicles being sold and there is a five-percent fee collected when vehicles are sold. Anderson says the drop in Road Use Tax funds could be significant.
“Right now we’re estimating at least a 25% reduction in state road funding,” Anderson says. “There is some discussion happening nationally about the potential for a future COVID relief fund by Congress to help backfill some of that lost revenue.”
Anderson says there’s not a lot of time before the drop in funding would be felt. “There’s about a month or two lag from when those are collected to when they are deposited into the Road Use Tax Fund and then distributed to the DOT and cities and counties,” according to Anderson.
“So we are expecting that we’ll start to see that reduction in May — with the May distribution of Road Use Tax Funds. So, this certainly has the potential to impact road construction projects.” Anderson says planners are working on contingency plans if the shortfall hits without any relief funds.
“We are looking at potentially delaying putting some projects out for bid here in the next couple of months just to be better prepare if that happens,” Anderson says. “Depending on how long this reduction is in place — there is the potential that it could impact the projects that are already under construction.”
Anderson says the state, counties, and cities would all have less funding, as a 25 percent reduction would be about $35 million each month to the fund. “A little less than half of that would be the reduction that the DOT would see. About a third of that is the reduction the counties would see, and then the remaining 20 percent of that is what Iowa cities would see as a reduction in state revenue for roadways,” Anderson says. He says they will continue to watch the numbers and determine the actions they need to take when it comes to state roadway construction.