The state of Iowa is in line for its first fuel tax increase in more than a quarter-century. Permit fees for certain truck loads could also be on the rise.
Iowa lawmakers are working on possible solutions to address an annual transportation funding shortfall estimated at $215 million a year.
Gov. Terry Branstad has called on state lawmakers to come up with more money for roads. He said the first fuel tax increase since 1989 could be part of the solution.
Following the Republican governor’s lead, the Senate and House voted this week to send Branstad a bill that would authorize a 10-cent-per-gallon increase on gas, diesel and alternative fuels.
The Senate approved SF257 Tuesday on a 28-21 vote. House lawmakers followed suit Wednesday on a 53-46 vote.
The increases would raise the tax rate on diesel from 22.5 cents to 32.5 cents and the tax rate on gas from 21 cents to 31 cents.
Paul Trombino, director of the state Department of Transportation, said the tax changes are expected to raise enough to plug the shortfall for critical local and state road funding needs.
Senate Transportation Committee Chairman Tod Bowman, D-Maquoketa, told lawmakers prior to the Senate floor vote that the state cannot wait any longer to approve more money for roads and bridges.
“Many of our rural bridges are closed or have weight restrictions because there’s no money to repair them,” Bowman said. “We can’t continue to kick this can down the road.”
Another component of the funding plan would result in permit fee increases for oversize and overweight trucks beginning Jan. 1, 2016. The fee increases would be as follows:
- The annual permit fee on vehicles up to 80,000 pounds would increase from $25 to $50.
- The annual permit fee on vehicles up to 156,000 pounds would increase from $300 to $400.
- The single-trip permit fee would increase from $10 to $35.
- The annual all-systems permit fee would increase from $120 to $160.
An additional fee increase would be implemented in 2017.
The Iowa DOT would also be required to identify $10 million in cost savings during each of the next two years.
If the governor signs the bill by the end of this week the fuel tax increase would take effect March 1. If he waits until next week it would kick in April 1.
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