Governor Kim Reynolds says state gas tax revenue isn’t keeping up with what’s needed to build and maintain Iowa’s roads and bridges and it may be time to have regular increases in the gas tax that are tied to inflation.
“We have to be careful about that because of how you decide what it is,” Reynold said Thursday. “…Are we looking at it monthly? Are we looking at it annually? Is there some stopgaps in there in case we see things really like we’re seeing right now with Iran war and the impact that that’s had on gas prices? But I think that’s probably the more realistic way to move forward.”
The tax rate on gasoline and diesel fuel hasn’t changed since the 10-cent hike that took effect 11 years ago. Reynolds said there’s a growing “delta” between the revenue being generated by that so-called “road use tax” and what is needed for the state’s transportation system. The property tax bill Senate Republicans released in January had a mechanism that would have automatically triggered incremental increases in the gas tax that were tied to a yearly inflation factor. However, that was not included in the property tax realignment package Reynolds signed into law last month. “I thought, actually, it was laid out pretty good,” Reynolds said. “But that’s the art of the deal.”
During property tax negotiations with legislators this spring, Reynolds was asked, but did not publicly share her opinion on whether the gas tax should be included. During Thursday’s taping of the “Iowa Press” program that airs tonight on Iowa PBS, Reynolds was asked about raising the gas tax. “It’s probably something we’ll have to continue to look at,” Reynolds said. “…I said ‘we’ll.‘ I keep forgetting I’m not going to be a part of it. It’s hard for me to think about it in those terms, so they’ll have to look at it probably.”
Reynolds signed the final batch of bills from the 2026 legislative session on June 2. She’s not seeking reelection and a new governor will be sworn into office during the first week of the 2027 legislative session.