Six-lane pipedreams: Iowa's road funding quandry
Cedar Rapids Mayor Ron Corbett announced this week that Cedar Rapids city officials will lobby the state to widen Interstate 380 to six lanes between Interstate 80 and the southern edge of the City of Five Seasons.
Good luck with that.
While I agree that 380 will need widening at some point, I highly doubt it will happen before 2020, when the DOT feels predicted traffic counts will necessitate expansion. Sure, government officials in the Iowa City–Coralville–North Liberty–Cedar Rapids “Corridor” could convince the DOT to place 380 widening on the department’s list of projects, but that does not mean it will happen anytime soon because — [gasp!] — there is no money for it.
The state’s road infrastructure is crumbling. In 2012, 5,358 of Iowa’s 24,799 bridges (21 percent) were considered deficient; another 1,320 (5 percent) were considered “functionally obsolete.” With a $215 million transportation funding shortfall, there is not enough money for renovations, upgrades, and routine maintenance.
Iowa’s 21-cent gasoline tax is the lowest in the Upper Midwest. (It is often reported that the state’s gas tax has not increased since 1989, but that is apparently not true. According to this Department of Revenue webpage, the gas tax increased incrementally from 20 cents to the current 21-cent tax since then. It even decreased in 2007–08.) Though there has been bipartisan support for a 10-cent increase to the gas tax spread out over three years, and a House subcommittee approved a measure to do so yesterday, it seems unlikely to gain the full support of the Legislature and The Mustache’s signature, especially in an election year. I could be wrong about that, though. If a gas tax increase passes in the House, I assume the Democrat-controlled Senate will pass it as well. Governor Branstad has been among those advocating for more transportation funding, but has sidestepped the issue by saying the per gallon gas tax is becoming a less viable means for infrastructure funding. A bill may languish unsigned on his desk.
I suppose Branstad and skeptical colleagues have a decent enough point and raise a vexing issue: How are we going to fund our road infrastructure in the future? The vehicles we drive are becoming more and more efficient and we are driving fewer miles, so the theory is that a per gallon gas tax will bring in less and less money. Increasing vehicle licensing fees has been mentioned, but officials want to make sure everybody using Iowa’s roads (i.e., interstate truckers and cross-country drivers passing through the state) pays their fair share. That is where the gas tax comes in, but what will it be if not per gallon? Someone recently floated a gas sales tax, where the price of each fueling is subject to a sales tax. That seems like a viable option, but I do not think that alone will close our current infrastructure funding gap.
(As an aside, I think it is interesting to look at how things are done internationally. Many European countries use a “vignette” system, but I highly doubt that would fly in the US, especially on a state-by-state basis. Much like the US, Canada taxes gasoline at the pump with federal and provincial taxes — though per liter and at a much higher rate. Many Canadian provinces also add a sales tax and some localities add their own sales tax. According to Wikipedia, the minimum gas tax in Canada is the equivalent of 95.8 cents per gallon. The US average is 49.5 cents, which includes the 18.4-cent federal tax.)
Equally unpalatable is dipping into the state’s nearly $1 billion savings. (That’s right, folks: Iowa has a budget surplus and is saving money. The Hawkeye State has a balanced budget law so state lawmakers can only spend something like 97 percent of the state’s revenue.) Not only do most state representatives dislike the idea of “one time” stopgap funding, but the state will need every penny of that savings to backfill local tax loses courtesy of last year’s commercial property tax reforms. Our nearly $1 billion surplus is projected to dwindle to $82.7 million in Fiscal Year 2018. For roads, the state wants a dedicated, longtime funding mechanism.
So how are we going to fund the widening of Interstate 380 and the state’s overall infrastructure needs? An increase in the per gallon gas tax, and perhaps the implementation of a gas sales tax, would help the state meet current needs and prepare for the future. But I think another dedicated funding option can be found in the very city that will be lobbying for 380 expansion. In November, voters in Cedar Rapids renewed a 1-cent sales tax that will exclusively fund road reconstruction and upgrading. We will see how it pans out, but I think a similar sales tax state-wide would be worth considering.
Good luck with that.
While I agree that 380 will need widening at some point, I highly doubt it will happen before 2020, when the DOT feels predicted traffic counts will necessitate expansion. Sure, government officials in the Iowa City–Coralville–North Liberty–Cedar Rapids “Corridor” could convince the DOT to place 380 widening on the department’s list of projects, but that does not mean it will happen anytime soon because — [gasp!] — there is no money for it.
The state’s road infrastructure is crumbling. In 2012, 5,358 of Iowa’s 24,799 bridges (21 percent) were considered deficient; another 1,320 (5 percent) were considered “functionally obsolete.” With a $215 million transportation funding shortfall, there is not enough money for renovations, upgrades, and routine maintenance.
Iowa’s 21-cent gasoline tax is the lowest in the Upper Midwest. (It is often reported that the state’s gas tax has not increased since 1989, but that is apparently not true. According to this Department of Revenue webpage, the gas tax increased incrementally from 20 cents to the current 21-cent tax since then. It even decreased in 2007–08.) Though there has been bipartisan support for a 10-cent increase to the gas tax spread out over three years, and a House subcommittee approved a measure to do so yesterday, it seems unlikely to gain the full support of the Legislature and The Mustache’s signature, especially in an election year. I could be wrong about that, though. If a gas tax increase passes in the House, I assume the Democrat-controlled Senate will pass it as well. Governor Branstad has been among those advocating for more transportation funding, but has sidestepped the issue by saying the per gallon gas tax is becoming a less viable means for infrastructure funding. A bill may languish unsigned on his desk.
I suppose Branstad and skeptical colleagues have a decent enough point and raise a vexing issue: How are we going to fund our road infrastructure in the future? The vehicles we drive are becoming more and more efficient and we are driving fewer miles, so the theory is that a per gallon gas tax will bring in less and less money. Increasing vehicle licensing fees has been mentioned, but officials want to make sure everybody using Iowa’s roads (i.e., interstate truckers and cross-country drivers passing through the state) pays their fair share. That is where the gas tax comes in, but what will it be if not per gallon? Someone recently floated a gas sales tax, where the price of each fueling is subject to a sales tax. That seems like a viable option, but I do not think that alone will close our current infrastructure funding gap.
(As an aside, I think it is interesting to look at how things are done internationally. Many European countries use a “vignette” system, but I highly doubt that would fly in the US, especially on a state-by-state basis. Much like the US, Canada taxes gasoline at the pump with federal and provincial taxes — though per liter and at a much higher rate. Many Canadian provinces also add a sales tax and some localities add their own sales tax. According to Wikipedia, the minimum gas tax in Canada is the equivalent of 95.8 cents per gallon. The US average is 49.5 cents, which includes the 18.4-cent federal tax.)
Equally unpalatable is dipping into the state’s nearly $1 billion savings. (That’s right, folks: Iowa has a budget surplus and is saving money. The Hawkeye State has a balanced budget law so state lawmakers can only spend something like 97 percent of the state’s revenue.) Not only do most state representatives dislike the idea of “one time” stopgap funding, but the state will need every penny of that savings to backfill local tax loses courtesy of last year’s commercial property tax reforms. Our nearly $1 billion surplus is projected to dwindle to $82.7 million in Fiscal Year 2018. For roads, the state wants a dedicated, longtime funding mechanism.
So how are we going to fund the widening of Interstate 380 and the state’s overall infrastructure needs? An increase in the per gallon gas tax, and perhaps the implementation of a gas sales tax, would help the state meet current needs and prepare for the future. But I think another dedicated funding option can be found in the very city that will be lobbying for 380 expansion. In November, voters in Cedar Rapids renewed a 1-cent sales tax that will exclusively fund road reconstruction and upgrading. We will see how it pans out, but I think a similar sales tax state-wide would be worth considering.
