Federal ‘transportation cliff' threatens Iowa road funding

State motor fuel tax increase inevitable, according to House Transportation Committee Chairman

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DES MOINES – Forget potholes, it’s the looming “transportation cliff” in federal highway funding that makes a state motor fuel tax increase inevitable, a key player in that debate said Jan. 23.

“That was a real eye-opener. Pretty sobering,” House Transportation Committee Chairman Josh Byrnes, R-Osage, said about projections of a 77 percent decline in federal highway funding in 2015.

Iowa Department of Transportation Director Paul Trombino III has been making the rounds at the Legislature to warn lawmakers that the state’s $215 million shortfall in funding to meet current “critical needs” will be compounded by the decrease in federal funds.

Although Trombino did not advocate for increasing the state fuel tax, Brynes said the director “gave us compelling evidence how necessary an increase is.”

“We won’t bite this off in one year,” he said, “but when you look at the numbers, it’s got to be inevitable.”

Byrnes and others advocate a phased increase of eight- to 10-cents a gallon.

Dave Scott has looked at the same numbers and says the Iowa Good Roads Association and Iowa Motor Truck Association members he represents at the Capitol agree.

“If you look at Road Use Tax Fund, we have our own fiscal cliff coming up in 2015,” Scott said after hearing Trombino’s presentation. “It drops off. Period.”

He and Trombino also point out that since fiscal 2010 motor fuel taxes have not been largest source of revenue for the RUTF. This year the tax accounts for 34 percent or $440 million of the $1.3 billion RUTF. Vehicle registration and license fees are 60 percent of the fund or $780 million.

Trombino told lawmakers that “through traffic” – out-of-state motorists who don’t pay registration fees account for an estimated 20 percent of traffic on the Iowa highway system, but account for about 13 percent of RUTF revenue.

“We’re a crossroads state,” Trombino said. “We see a lot of through movement, freight movement, through the state.”

However, he said, Iowa is not “capturing a significant through value from that movement.”

“Through users are not paying their fair share,” Trombino said.

Asked during an appearance before the Senate Transportation Committee Wednesday whether he will propose a fuel tax increase, Trombino said he will advocate for “diversity in funding.”

“We want to bring forth a number of options,” he said, explaining that more funding options will provide greater stability for the department.

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