Diesel downtrend hits Iowa road tax coffers

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(MCT) — A downdraft in the trucking industry gave Iowa’s road use tax fund the sniffles in 2009.

Officials who watch the state’s road use tax funds say diesel burners didn’t keep on truckin’ in 2009 the way they have in the past in Iowa.

Falling diesel sales was the biggest factor in a 2.2 percent drop in the state’s fuel tax collections, from $442.9 million in fiscal 2008, to $433.2 million in fiscal 2009.

In June alone, diesel tax collections were down about $1.5 million, or 11.8 percent, to $11.35 million. That com pared to $12.86 million in June 2008.

The diesel downtrend last fiscal year represented a shift in the transportation economy, said Gene Jones, a transportation planner for the Iowa Department of Transportation. He said Iowa gas tax collections fell in 2008, as Iowans cut back on discretionary travel because of high gas prices and economic uncertainty.

The downturn shifted to diesel taxes in 2009, as falling sales cut into the number of truckload deliveries of goods crossing the state.

“It definitely follows the economy,” Jones said.

It’s not just the economy, said Chris Hummer, vice president of Don Hummer Trucking in Oxford, which has about 150 rigs on the road.

Hummer said most trucking companies took steps to make their rigs more fuel efficient when diesel prices went sky-high in 2008, and also improved truck routing to reduce the number of miles they travel.

“If the economy was to return to its previous state, the trucking industry is still going to use marginally less fuel than before,” Hummer said.

Indeed, Jones said the state only is projecting an increase of overall motor fuel tax collections of about 1 percent annually over the next four years, to about $435 million.

Jones said overall traffic on the state’s roadways finally has reversed its downturn. Traffic climbed by 2.3 percent in June as measured by the Iowa Department of Transportation’s traffic counter system. The increase in traffic counts takes a while to show up in the state’s accounts as higher motor fuel tax revenues.

Jones said the state’s forecast slightly too high its fuel tax revenues by about 2 percentage points for the last two years. Because the forecasts are prepared about six months before the actual revenues begin to come in, state budget forecasters cannot foresee factors such as the nearly $4-per-gallon gas that gave motorists fits in 2008, or the rapid deterioration of the economy that chilled truck shipping in 2009.