Iowa gas tax, vehicle fees could be going up
By Bret Hayworth Journal staff writer | Posted: Friday, September 07, 2007
Iowa Gov. Chet Culver has said a gasoline tax increase to raise more revenue for Iowa Department of Transportation highway projects was a nonstarter in a time of nearly $3 per gallon gas.
State Sen. Steve Warnstadt, D-Sioux City, who is part of a legislative panel studying revenue streams for IDOT, isn't so sure such an increase is off the table.
Warnstadt and Woodbury County and Sioux City officials spoke Thursday after a look at IDOT's Gordon Drive viaduct reconstruction project. They lamented the tough chore IDOT and local entities face in keeping roads intact in the face of rising costs and flat revenues.
A December 2006 IDOT report showed the department is facing an annual budget shortfall of at least $200 million.
"Iowa is facing a $27.7 billion shortfall in the next 20 years," the report says. Paring that back to advancing just the most critical road projects still results in a $4 billion shortfall, IDOT planning, programming and modal division director Neal Volmer said.
Warnstadt is gathering information as he serves on the Transportation Investment Moves the Economy in the 21st Century Committee, which is studying long-term solutions to funding Iowa highway infrastructure. In January, the TIME-21 Committee will make recommendations to the Legislature about whether revenue increases for the IDOT budget are needed.
The goal is to determine how to bring in roughly $200 million more annually, Warnstadt said.
Funding options
Among the funding streams under discussion are an increase in the gasoline tax, an increase in pickup-truck registration fees to be more in line with car registration fees and increasing license fees, he said.
"We are going to be looking at all the revenue streams," Warnstadt said. "At this point, nothing is off the table. Talking with my colleagues, we haven't decided to eliminate anything. We are trying to keep our options as flexible as possible."
The Iowa gasoline tax is 20 cents per gallon and was last increased in 1989. Volmer said each penny increase in the gasoline tax would raise $12 million.
Of Culver's position on the gas tax increase, Warnstadt said, "I don't think that is on the top of his agenda, but I don't think he has drawn a line in the sand."
Warnstadt said an advantage with a gasoline tax is that it isn't paid only by Iowans; that those traveling through the state filling up also help fatten the state's coffers.
"We are going to try to take a look at what is the impact on the average citizen of any fee increase so that we don't have too small of a group paying all of the burden. I think everyone who is using the roads needs to be having a contribution," Warnstadt said.
Asked if he had a preference among the revenue pieces being mulled, City Manager Paul Eckert said: "It is premature to answer that question. It really is a statewide decision, led by the Legislature. ... We just know that our fuel tax isn't getting it done."
Of all the programs the city operates, Eckert said, funding street projects is the most dependent upon federal and state revenue. City Engineer Chris Payer gave the example that in 2002, it cost $570,000 to reconstruct seven blocks of Morningside Avenue. That same amount of money, Payer said, was sufficient to rework only 4.5 blocks in a 36th Street project this year.
City Field Services Director Judy Nicolls said the woes of keeping roads up trickles down even to her department, which handles filling of pot holes on the 441 miles of city streets. In 2007, she said, there are areas "with patches on top of patches."
"The funding is not keeping up with inflationary costs," Nicolls said.
Good roads called essential
Volmer said good roads are important for a robust Iowa economy, especially for farmers getting crops and livestock to markets. But doing that with heavy trucks, he added, puts a great amount of wear and tear on the 114,000 miles of Iowa highways.
Woodbury County Engineer Dick Storm said county roads have been bearing heavier loads in recent years as livestock confinement operations get bigger and more dairies do business. He said grain carts and fertilizer applicators are placing an increasing strain on the roads.
Repairing county roads, Storm said, is more difficult after seven years of flat revenues from county road-use taxes. At the same time, he said, costs are spiking. For example, he said, typical 3-inch asphalt resurfacing projects cost $64,000 per mile in 2000, but now the cost per mile is slightly more than $100,000.
The Iowa transportation budget discussions come at a time when the federal government is wrestling with transportation funding. On Wednesday, House Democrats feuded with Republicans over raising gasoline taxes to pay for bridges, a month after an interstate bridge collapsed in Minneapolis and killed 13 people.
The chairman of the House Transportation Committee promoted a plan to increase the federal gas tax from 18.3 cents per gallon to 23.3 cents. The additional money raised would go to a bridge trust fund.
Bret Hayworth may be reached at (712) 293.4203 or brethayworth@siouxcityjournal.com
BREAKOUT:
Gasoline taxes per gallon, by state:
Iowa -- 21 cents
South Dakota -- 20 cents
Nebraska -- 28 cents
Minnesota -- 22 cents
North Dakota -- 23 cents
State Sen. Steve Warnstadt, D-Sioux City, who is part of a legislative panel studying revenue streams for IDOT, isn't so sure such an increase is off the table.
Warnstadt and Woodbury County and Sioux City officials spoke Thursday after a look at IDOT's Gordon Drive viaduct reconstruction project. They lamented the tough chore IDOT and local entities face in keeping roads intact in the face of rising costs and flat revenues.
A December 2006 IDOT report showed the department is facing an annual budget shortfall of at least $200 million.
"Iowa is facing a $27.7 billion shortfall in the next 20 years," the report says. Paring that back to advancing just the most critical road projects still results in a $4 billion shortfall, IDOT planning, programming and modal division director Neal Volmer said.
Warnstadt is gathering information as he serves on the Transportation Investment Moves the Economy in the 21st Century Committee, which is studying long-term solutions to funding Iowa highway infrastructure. In January, the TIME-21 Committee will make recommendations to the Legislature about whether revenue increases for the IDOT budget are needed.
The goal is to determine how to bring in roughly $200 million more annually, Warnstadt said.
Funding options
Among the funding streams under discussion are an increase in the gasoline tax, an increase in pickup-truck registration fees to be more in line with car registration fees and increasing license fees, he said.
"We are going to be looking at all the revenue streams," Warnstadt said. "At this point, nothing is off the table. Talking with my colleagues, we haven't decided to eliminate anything. We are trying to keep our options as flexible as possible."
The Iowa gasoline tax is 20 cents per gallon and was last increased in 1989. Volmer said each penny increase in the gasoline tax would raise $12 million.
Of Culver's position on the gas tax increase, Warnstadt said, "I don't think that is on the top of his agenda, but I don't think he has drawn a line in the sand."
Warnstadt said an advantage with a gasoline tax is that it isn't paid only by Iowans; that those traveling through the state filling up also help fatten the state's coffers.
"We are going to try to take a look at what is the impact on the average citizen of any fee increase so that we don't have too small of a group paying all of the burden. I think everyone who is using the roads needs to be having a contribution," Warnstadt said.
Asked if he had a preference among the revenue pieces being mulled, City Manager Paul Eckert said: "It is premature to answer that question. It really is a statewide decision, led by the Legislature. ... We just know that our fuel tax isn't getting it done."
Of all the programs the city operates, Eckert said, funding street projects is the most dependent upon federal and state revenue. City Engineer Chris Payer gave the example that in 2002, it cost $570,000 to reconstruct seven blocks of Morningside Avenue. That same amount of money, Payer said, was sufficient to rework only 4.5 blocks in a 36th Street project this year.
City Field Services Director Judy Nicolls said the woes of keeping roads up trickles down even to her department, which handles filling of pot holes on the 441 miles of city streets. In 2007, she said, there are areas "with patches on top of patches."
"The funding is not keeping up with inflationary costs," Nicolls said.
Good roads called essential
Volmer said good roads are important for a robust Iowa economy, especially for farmers getting crops and livestock to markets. But doing that with heavy trucks, he added, puts a great amount of wear and tear on the 114,000 miles of Iowa highways.
Woodbury County Engineer Dick Storm said county roads have been bearing heavier loads in recent years as livestock confinement operations get bigger and more dairies do business. He said grain carts and fertilizer applicators are placing an increasing strain on the roads.
Repairing county roads, Storm said, is more difficult after seven years of flat revenues from county road-use taxes. At the same time, he said, costs are spiking. For example, he said, typical 3-inch asphalt resurfacing projects cost $64,000 per mile in 2000, but now the cost per mile is slightly more than $100,000.
The Iowa transportation budget discussions come at a time when the federal government is wrestling with transportation funding. On Wednesday, House Democrats feuded with Republicans over raising gasoline taxes to pay for bridges, a month after an interstate bridge collapsed in Minneapolis and killed 13 people.
The chairman of the House Transportation Committee promoted a plan to increase the federal gas tax from 18.3 cents per gallon to 23.3 cents. The additional money raised would go to a bridge trust fund.
Bret Hayworth may be reached at (712) 293.4203 or brethayworth@siouxcityjournal.com
BREAKOUT:
Gasoline taxes per gallon, by state:
Iowa -- 21 cents
South Dakota -- 20 cents
Nebraska -- 28 cents
Minnesota -- 22 cents
North Dakota -- 23 cents
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