AMES, Iowa – An Iowa State University economist has studied what a proposed ten-cent gas tax increase would cost drivers in Iowa.
Dave Swenson is an Associate Scientist in Economics at Iowa State University. Swenson calculates that with the dime increase a person drives 30,000 miles in a year, in a vehicle getting 25 miles per gallon, it would cost $80 a year. If you drive a truck or vehicle that gets about 10 miles per gallon, driving 30,000 miles, the increase would be $300 per year.
“In all, it’s not as much as people think,” said Swenson. “We know the state of Iowa has lagged in its maintenance, construction and repair across the board, with regard to roads.”
Swenson said not fixing the roads will also cost Iowans. “We are probably experiencing more wear and tear on our cars, or wasted time traveling because of our backlog in transportation spending, than the cost of this current increase.”
The proposed ten-cent increase would raise $200 million for the state. Swenson said that would mean almost 1900 jobs in construction, supply, and main street business. “It there is a time to do it, this is the time, we’re currently enjoying gas prices that are a dollar less than they were a year ago . . . If our road system deteriorates, it has consequences for the whole economy.”
Changing demographics are impacting the gas tax collection also. Swenson said vehicles are more efficient, younger people are opting to drive less or even not own cars. That means state officials may be looking at alternative models for funding road repairs. Swenson said that could include a license surcharge, or even having people pay by how many miles they drive, but Swenson adds reporting how many miles you drive could create an incentive to cheat.