Land transportation is funded by taxpayers through fuel taxes, however these taxes are not indexed to inflation. So while material and labor costs go up, Iowa keeps the same 21 cents per gallon tax on fuel.
The Soy Transportation Coalition wants to change that policy, they propose an initial one-cent reduction on the tax before indexing it to inflation.
Soy Transportation Coalition Executive Director Mike Steenhoek says the fuel tax is a shortcoming, both nationally and here in Iowa. It hasn’t been raised since 1993 federally, and Iowa taxes have been the same since 1989.
With funding gaps ever present in the state transportation budget, Steenhoek says this is a sustainable option.
“That may not be perfect but at least will provide a significant amount of revenue moving forward and will be sustainable and if that’s achieved, then that would be a big win.”
The Iowa Department of Transportation estimates there’s an annual funding gap of $215 million.
Steenhoek says, “It’s not a surprise that you have this funding gap, I mean it might not have been an intended consequence but it is an unavoidable consequence that you are going to have these funding gaps. You know, this is a way to try and address that.”
He thinks with this new system in place, road use will pay for road repair.