Iowa Gov. Terry Branstad on Tuesday, Jan. 24, unveiled plans to save $50 million to benefit road and bridge work in the state.
The governor said cost savings and efficiencies at the Iowa Department of Transportation are needed before state lawmakers authorize any fuel tax increases to help address an estimated $215 million annual budget shortfall.
A 15-page report released from the state DOT this week identifies $33 million in annual savings and $17 million in one-time savings that would help eat into the budget gap.
“In a time when Iowans across the state are tightening their belts, state government must spend dollars we receive more efficiently and streamline operations to maximize every dollar,” Branstad said in a statement.
Spurred by the recommendation of a citizen task force, a bi-partisan effort is underway in Des Moines to improve roads and bridges throughout the state via a fuel tax increase. In fact, the governor’s Citizen Advisory Commission voted in fall 2011 to endorse a proposal to increase the state’s fuel tax rates by 8 to 10 cents per gallon.
Branstad has said he will not support a fuel tax increase this year. Instead, the governor said he believes cost savings elsewhere are the first priority.
The largest savings identified is $10 million a year through a streamlined process for delivering projects ahead of schedule and under budget.
Another $8 million annually would result from policies to more efficiently collect fees due to the agency. A portion of the savings would result from putting online renewals for driver’s licenses, which would save government employees 41,000 hours each year.
Also included in the savings plan is $1.5 million through development of a plan to improve management of interstate rest areas and truck weigh stations. A portion of the plan would be accomplished through a reduction in annual rest area maintenance from $4.2 million to $3.7 million.
Sponsorship opportunities are expected to be included to offset maintenance costs.
About $11 million in one-time savings would be accomplished through improved asset management resulting from a cooperative effort between IDOT and local government.
Branstad said he is confident the savings will be realized.
“I recognize some of these measures will require legislative action, approval of the Iowa Transportation Commission or cooperation with other federal, state and local agencies,” Branstad stated.
In the meantime, Sen. Tom Rielly, D-Oskaloosa, and Rep. David Tjepkes, R-Gowrie, have proposed legislation to increase the state’s fuel tax rates by 8 cents over two years and charge an extra 1 percent in new vehicle registration fees.
It is estimated that each penny added to the state’s 21-cent-per-gallon gas tax and 22.5-cent-per-gallon diesel tax would generate about $22 million in revenue. The 1 percent vehicle fee would bring in an estimated $50 million.
The savings identified by Gov. Branstad would be the equivalent of a 2-cent fuel tax increase.
To view other legislative activities of interest for Iowa, click here.
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