February 28, 2024

Our roads — How are they funded?

By Jon Dunwell

As we enter into the later stage of this legislation, appropriation (budget) bills become the “big” bills of consideration. Roads, the upkeep of our roads, the funding of roads … all big issues many don’t understand.

This week, the Transportation Appropriations Bill (House File 2557) overwhelmingly passed the Iowa House with bipartisan support.

Annually, this budget bill moves funds from the Road Use Tax Fund and the Primary Road Fund to the Department of Transportation for a total of $416.1 million.

The Road Use Tax Fund is a fund made of dedicated highway user revenue, collected through a state excise tax on fuels. No state general fund revenue is used for highway projects in Iowa. Established in 1949 by the 53rd Iowa General Assembly, the Road Use Tax Fund (RUTF) provides the funding for the state’s primary, secondary and municipal roadway systems. After some off-the-top diversions, receipts into the RUTF are distributed according to a formula of 47.5 percent for the Primary Road System (State), 24.5 percent for secondary county roads, 8 percent for farm-to-market county roads, and 20 percent for city streets. Legislation that went into effect in 2003, which involved the transfer of jurisdiction of some roadways from the state to either a city or county government, requires a share (1.75 percent) of the Primary Road System funds be paid to local governments.

The Treasurer of State is required to allocate the RUTF moneys by formula to the Primary Road Fund, the Secondary Road Fund, the Farm-to-Market Road Fund, and the Street Construction Fund of the Cities. Moneys in the Primary Road Fund may be used to construct and maintain the primary road system and for expenses related to the primary road system, including the maintenance of DOT facilities and merit pay increases for DOT employees for which appropriations are not otherwise made.

With the advent of more electric vehicles in the future, our funding of roads will require some adjustment. Be looking for future legislative sessions to address this important issue that impacts us all.

Don’t forget, you always have a “seat at my table” of decision-making. Please feel free to share your thoughts and perspectives. 515-325-7001 or jon.dunwell@legis.iowa.gov .