Iowa lawmakers to consider fuel tax increase

| 11/27/2007

A plan under study in Iowa would raise $200 million for road improvements through increases to certain taxes and fees.

A bipartisan legislative panel agreed to offer a package to lawmakers and Gov. Chet Culver in an attempt to avoid an election-year standoff on the issue. The package was proposed by the Associated General Contractors of Iowa, a road construction industry group.

Trying to head off a projected shortfall, the interim panel is touting an increase in the state’s fuel tax by 4 cents per gallon. The tax would increase by 2 cents on May 15, 2008, and another 2 cents on Jan. 1, 2009.

Currently, the per-gallon tax rate for diesel is 23.5 cents and the gasoline tax is 22 cents.

They also want to boost registration fees for pickup trucks, driver’s licenses, trailer registrations and title fees. The fee for trailers that weigh more than 2,000 pounds would increase from $10 to $30.

The panel was appointed by the Iowa Legislature after a state Transportation Department study concluded that the state faces a shortfall of at least $200 million a year for road and bridge work throughout the state.

The shortfall is blamed on fuel tax revenues that don’t go as far as they used to, increased congestion and higher construction costs.

The package can be considered by lawmakers during the regular session that begins in January.

To view other legislative activities of interest for Iowa in 2007, click here.

– By Keith Goble, state legislative editor