State Senator: Raise Iowa’s gas tax to fund road projects
Iowa’s roads and bridges are in bad shape. That can make businesses hesitant to locate or expand here, and hinders efforts to grow our economy and create more good jobs.
It’s a problem that is getting worse because Iowa’s Road Use Fund isn’t bringing in enough money to pay for the mounting work that needs to be done. Just to cover our most critical projects, we need an extra $215 million a year. It costs a lot to maintain 114,000 miles of roads and 25,000 bridges.
Other states have faced similar problems and have found solutions. Iowa can too.
Currently, Iowa’s roads and bridges are paid for with a per-gallon tax on fuel and vehicle registration fees. Iowa’s fuel tax is low compared to surrounding states. That sounds good, but it means visitors to Iowa kick in less to fix our roads than we pay them when traveling in their states.
Last summer, I drove to Chicago and kept close track of my travel expenses. The trip cost me almost a dime per mile in Illinois fuel taxes and tolls. If an Illinois resident drove through Iowa in a similar car, they’d pay less than a penny a mile to use our roads.
But our low gas tax isn’t the whole story. Raising the per-gallon tax on fuel by a penny would generate an additional $20 million a year. However, construction costs continue to increase dramatically, and new cars travel farther on less fuel. Over time, a per-gallon tax on fuel provides fewer dollars to pay for projects that get more expensive each year.
While we continue to make the Iowa Department of Transportation more efficient, that alone won’t solve our problems. In rural areas, counties have resorted to borrowing money—and paying interest—to maintain roads and bridges. Not only are we shelling out more to pay for our roads this way, the buck gets passed on to property tax payers rather than road users.
The DOT recently floated several ideas for raising more road funds over the long term. You can see all of them at http://tinyurl.com/DOT-funds-13. Their ideas include getting rid of Iowa’s per-gallon tax on fuel and replacing it with a sales tax on fuel. The department also proposes increasing registration fees on vehicle purchases from 5 to 6 percent. That would make it comparable to the sales tax, which Iowans do not pay on vehicle purchases.
The idea of turning our major thoroughfares into toll roads to bring in lots of money—like Illinois does—is complicated and expensive to administer. Oregon plans to charge vehicles based on the miles they travel. It appears to be a fair approach, but it’s not yet ready for prime time.
Right now, Iowa has the largest budget surplus in state history. It could help knock out some major road projects, but that approach does not address the root of the funding problem. What happens in the long term when the surplus is gone?
As chairman of the Senate Transportation Committee, I want to provide leadership for growing our economy, creating good jobs throughout the state, and solving the problems Iowa faces when it comes to our roads.
What do you think? Please share your thoughts with me by writing to email@example.com. I also encourage you to contact your state legislators and Governor Branstad. They work for you, and the input you give them makes a big difference in what happens at the Statehouse and on Iowa’s roads.
Bowman is chairman of the Iowa Senate Transportation Committee.