Iowa Corn Supports Fuel Tax Increase

Iowa Corn Supports Fuel Tax Increase

Iowa Corn Growers Association supports a proposed increase in the state's fuel tax to help fund badly-needed road improvements in Iowa. The governor's citizen advisory commission has recommended an 8 cent to 10 cent per gallon tax increase.

Iowa Corn Growers Association leaders say their organization will support a proposed fuel tax increase to fund badly needed improvements to roads and bridges in the state. Last week Iowa Farm Bureau president Craig Lang indicated his organization would also support the proposed tax increase to repair and replace deteriorating roadways and bridges. This issue will likely be debated in the 2012 session of the Iowa Legislature.

The Governor's Transportation 2020 Citizen Advisory Commission (CAC) has proposed an eight to ten cents per gallon gas tax increase to generate funding to improve Iowa's roads and infrastructure. The commission, appointed by Iowa Governor Terry Branstad, has conducted research and held public hearings across the state prior to issuing the recommendation in late October.  

The CAC found that Iowa's roads are in need of approximately $200 million per year for maintenance costs. Iowa's Road Use Tax Fund is constitutionally protected, and the gas tax may not be used for other purposes. According to the CAC, $230 million in additional funding could be created by a ten cent gas tax increase. This fund-generating method would collect money from those using the road system and would make improvements to roads, bridges, and flood-damaged highways.  

Iowa roads, bridges essential to getting agricultural production to market

The policy of the Iowa Corn Growers Association states, "We support a fuel tax increase to fund transportation improvements to existing transportation infrastructure in the state of Iowa." Iowa's roads and infrastructure system are essential to agriculture and corn production, and Iowa's farm to market roads and rural bridges are in need, says Mindy Larsen Poldberg, ICGA's director of government affairs. The commission's recommendation will now be considered by the Iowa Department of Transportation and will also be submitted to the Iowa Legislature by the end of the year.

Iowa Farm Bureau president Craig Lang says a fuel tax hike is the "fairest way" to fund road repairs. "Our members believe it is imperative to repair our roads and bridges, especially those in rural areas of the state," says Lang. "And we believe that an increase in the fuel tax is the fairest way to fund those repairs because it charges people who actually use the roads whether they live in Iowa or are from out of state."

Lang notes that Iowa Farm Bureau delegates to the farm organization's annual meeting in 2008 approved policy calling for an increase in the state fuel tax to raise funds to repair the state's roads and bridges.

Iowa's fuel tax (21 cents for gasoline) hasn't been increased since 1989

Iowa's current fuel tax, at 21 cents per gallon for gasoline and 22.5 cents per gallon for diesel fuel, has not been increased since 1989. According to the Iowa Department of Transportation's TIME 21 report published in 2008, the construction cost index in Iowa grew 67% from 2004 to 2008 and a dollar spent on construction today goes only half as far as it did in 1993.

The late October 2011 recommendation for a fuel tax increase was made by the Citizen Advisory Commission, which advises the Iowa Department of Transportation and was appointed by Governor Branstad, notes Lang. Many Farm Bureau members participated in the commission's listening sessions around the state, which were held during the summer to gather Iowans' views on ways to fund needed repairs for public roads and bridges.

The CAC recommendation for an increase in the fuel tax will be submitted to the Iowa Legislature by the Iowa DOT in preparation for the 2012 legislative session. The CAC also recommended increasing the fee for purchase of new and used vehicle registrations to 6% from the current 5%. That change would raise an estimated $50 million per year. In addition, the commission advised the Iowa DOT to evaluate and recommend a funding mechanism that applies to drivers of alternatively-fueled vehicles (hybrids, electric-powered cars and others) who use roads but pay limited fuel taxes.

The CAC report shows that current forecast revenues will fall short of critical funding needs by $215 million per year. The impact of the chronic shortfall in funding, the report says, is increases in the number of bridges throughout Iowa with weight restrictions, an increasing number of bridge closures and deteriorating conditions across the state's transportation system.

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