Higher fuel taxes not out of the question in Iowa

| Tuesday, November 28, 2006

Dwindling tax revenue for roads and increasing highway construction costs could mean higher taxes at fuel pumps in Iowa.

The Iowa Legislative Services Agency reports that road-use money is expected to reach $1.1 billion this fiscal year, which is about $700,000 below last year. It is only the second time in a quarter century that the road use tax fund faces a downturn in revenue, The Des Moines Register reported.

The decline in the fund is attributed to such factors as a decrease in use tax revenues, which are collected on the purchase of cars and trucks; and modest increases in fuel tax revenue and vehicle registration and title fees.

The funding problem is compounded by increased construction costs, a decline in the rate of growth of federal and state highway dollars and road building demands.

A 5-cent increase in the state's fuel tax would generate $110 million annually, The Register reported.

Truckers in Iowa now pay state taxes of 22.5 cents per gallon on diesel. Other drivers pay 21 cents per gallson for gasoline.

To make matters worse for the state, a new $2 billion, five-year road construction program approved this month by the Iowa Department of Transportation has projected costs that exceed revenues by $90 million.

State House Speaker-elect Patrick Murphy, D-Dubuque, said that Democrats will likely discuss the road funding issue at a policy caucus next month.

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