Iowa Considers Fuel Tax Hike

Tom Warne Report, 24 January 2012

Land Line Magazine – January 16, 2012

Iowa lawmakers are seriously considering a proposed increase to the fuel tax despite the governor’s apparent lack of support for such an effort. The governor’s Citizen Advisory Commission spurred the bipartisan push in Des Moines to raise the state fuel tax by 8 to 10 cents per gallon. The 21-cent gas tax and 22.5-cent diesel tax have remained unchanged since 1989.

The 16-member advisory panel was charged with finding transportation funding options to address an annual state budget shortfall of about $220 million. The group spent two months obtaining public input about potential funding alternatives for needed transportation improvements. Sen. Tom Reilly, D-Oskaloosa, and Rep. David Tjepkes, R-Gowrie, have proposed raising fuel tax rates by 8 cents over two years and charging an additional 1 percent in new vehicle registration fees.

According to estimates, each penny added to the state’s fuel tax would generate $22 million in revenue. The 1 percent vehicle registration increase would raise $50 million per year.

Who believes that a revenue stream that was last changed in 1989 is still adequate to meet Iowa’s transportation need’s today? I could ask that about almost every state. Would you be able to afford your lifestyle today on what you were making in 1989? TW

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