Iowa lawmakers offer variety of road funding options

By Keith Goble, Land Line state legislative editor | Thursday, February 27, 2014

Iowa state lawmakers are working on multiple solutions to help address an annual transportation funding shortfall estimated at $215 million a year.

Leading state officials are reluctant to support increasing the state’s 22.5-cent-per-gallon diesel tax and 21-cent-per-gallon gas tax. Gov. Terry Branstad said he remains open to coming up with a funding plan while Transportation Director Paul Trombino has said there isn’t one single fix to address the state’s needs.

As a result, lawmakers are pursuing a variety of potential fixes for slumping revenues for roads and bridges.

Sen. Joni Ernst, R-Red Oak, is the sponsor of one bill that would require a portion of the revenue collected from the state sales tax to be rerouted to the road use tax fund for 20 years.

The amount to be transferred from the sales tax would be one-half of 1 percent.

SF2149 is in the Senate Ways and Means Committee.

Another bill in the Senate Ways and Means Committee would tap the general fund to boost available funds for roads. Sponsored by Sen. Amy Sinclair, R-Allerton, SF2042 would authorize annual transfers of 2 percent of the adjusted gross revenue for the fiscal year.

This year, estimates would put the shift at $130 million.

A bill in the Senate Appropriations Committee would tap the state’s general fund to pay for road and bridge work. SF2072 would allocate $200 million for construction, maintenance and repairs on local roads and bridges.

Sponsored by Sen. Mark Chelgren, R-Ottumwa, the bill would make available $99 million to be distributed equally to counties around the state, and the remaining $101 million would be distributed to counties on a per capita basis.

On the House side, Rep. Lee Hein, R-Monticello, is behind a bill that would add money for road repairs. HF2147 would deposit up to $220 million annually from the general fund to the road fund.

During years that the full amount cannot be allotted for road repairs, the tax rates on gas and diesel would be increased to make up the difference.

“At the end of the year the temporary tax increase reverts back to zero,” Hein wrote on his website. “Then the process starts over again.”

The bill is in the House Transportation Committee.

Another bill would authorize a 10-cent-per-gallon increase on gas and diesel over three years. Specifically, HSB514 would impose a 3-cent increase in July. The tax would increase another 3 cents in 2015 and 4 cents in 2016.

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.

The change is expected to raise $230 million annually – enough to plug the shortfall for local and state road funding needs.

The bill recently advanced from a House subcommittee to the House Transportation Committee.

Time is running out for the bills. The deadline for bills to advance from their originating committee is Friday, Feb. 28.

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