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Editorial: Raise the gas tax to increase revenue

BY DI EDITORIAL BOARD | FEBRUARY 22, 2013 5:00 AM

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The Iowa Legislature has considered a proposal that would increase by 10 cents Iowa’s motor-fuel tax, more commonly called the gas tax. This proposal is politically unpopular, given that gases prices are relatively high and the economy has not fully recovered.

However, as Stuart Anderson, the director of the Iowa Department of Transportation’s planning, programming, and modal division, pointed out, his department loses $215 million per year — revenue that can be made through taxing the gas used to power cars.

The Daily Iowan Editorial Board believes that raising the gas tax for Iowans is the best way to raise revenue for highways and transportation services is through raising the gas tax.

Associate Professor Paul Hanley, the director of the Transportation Policy Research Group at the University of Iowa Public Policy Center, estimated that the average driver pays $150 to $200 in gas taxes every year, and he expects the proposed 10-cent tax increase on a gallon of gas to increase the yearly bill by approximately $50.

“Most consumers think that we’re paying thousands of dollars in fuel tax, and we’re not,” he said.

Iowa’s gas tax hasn’t risen since 1989, and because of inflation, especially in the construction industry, brings in 43 percent less revenue than when the tax was implemented, according to a report from the Institute on Taxation and Economic Policy.

Building on these funding problems, as well as rising fuel efficiency and reduced travel in the state, which peaked in 2004, has further reduced the revenue the gas tax creates.

“Flat revenue streams compounded by growing construction costs have reduced our buying power,” Anderson said. This severely limits the Iowa DOT’s ability to repair transportation infrastructure.

The gas tax provides 34 percent of the Iowa DOT’s funding, and even though the agency, cooperating with county and city governments, has made significant budget cuts since 2002, including staff reductions of 26 percent and eliminating 39 field offices, which provided another $45 million to invest in roads, the DOT still comes up short.

The total federal and state gas tax in Iowa is lower than all surrounding states except Missouri, according to data from the American Petroleum Institute. Further, as of 2009, Iowa ranked 14th in the nation for miles of roadway and has nearly 25,000 bridges to maintain, according to data from the Iowa DOT.

While the effort to run and maintain an efficient government without placing a harsh burden on taxpayers is valiant, given Iowa’s circumstances, the DI Editorial Board believes that the gas tax must rise.

The residents of Iowa cannot expect a state in our position to take care of all the transportation infrastructure, given rising construction costs, our vast road network, and currently weak revenue streams. If Iowans want good roads, they have to pay for them. The cost for the vast majority of drivers would not be prohibitively expensive.

While it’s necessary to raise the gas tax, it isn’t the only part of the solution. Largely because of seemingly perpetual increase fuel efficiency, it is merely a short-term fix. Both Hanley and Anderson agreed that a variety of tactics, which may include charging drivers for how many miles they drive, toll booths, and other means of garnering revenue to maintain Iowa’s transportation infrastructure.


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