Sharing the load

Dave Elgin figures Cedar Rapids gas-station customers pump about $50 million a year into the state's road-use tax fund. Of that, no more than $11 million comes back to the city to maintain its streets.

Elgin, the city's public works director, says the state's formula for distributing road-use tax fund revenue shortchanges local motorists.

“If 75 percent of their miles are driven in the city and they're buying gas and they're only getting 25 percent of that back, that's not meeting the original intent of the formula,” Elgin said, pointing out many Cedar Rapids streets see heavy truck traffic delivering loads to and from local ag processing plants.

Drivers in Iowa pay 21 cents per gallon of gas in state taxes - 19 cents a gallon for ethanol blends, 22.5 cents for diesel, a rate set in 1988. With 23 years' worth of inflation driving costs, officials with the Iowa Department of Transportation say the state has a $215 million “critical shortfall” in funding for road maintenance and improvements.

With Gov. Terry Branstad lukewarm toward raising the tax - he's said he'd sign a fuel-tax increase but hasn't made it a priority - the state's larger cities could benefit from adjusting the distribution formula but at the expense of rural road departments, which are hard-pressed themselves.

“Eighty percent of the roads in the state are in the county system,” said Buchanan County Engineer Brian Keierleber. “They all serve businesses - the farms.”

Those farms are shipping more of their crops to processors in places like Cedar Rapids, generating heavier truck traffic.

“It used to be you raised the grain on the farm and fed it to the livestock and sold what you didn't need,” said Keierleber. “It doesn't work that way anymore.”

Buchanan County received $3.1 million this year from the road-use tax fund and another $900,000 from the state's farm-to-market road fund.

“The vast majority of the secondary road budget comes from the gas tax,” Keierleber said. “Iowa has more bridges than California, and I've got a lot of old bridges.”

Linn County gets $5 million from the road-use tax fund and about $1 million in farm-to-market funds, County Engineer Steve Gannon said. The county's road budget gets a big boost of about $4.5 million a year from the local-option sales tax that will end in 2014, unless voters approve a 10-year extension March 6.

Johnson County Engineer Greg Parker said his department gets about $1.3 million a year from the road-use tax fund.

“There's an awful lot of vagaries in that road-use tax fund,” Gannon said.

The state distributes the revenue for state highways, city streets and county secondary roads. Cities' shares are based on population. The formula for secondary roads takes into account a county's area, its rural population and miles traveled, its mileage of paved and dirt roads, and total bridge length.

Lawmakers created the TIME-21 fund in 2005 to at least partly address the shortfall. Funded through an increase in vehicle registration and title fees, TIME-21 is distributed as 60 percent to the state, with the balance split by cities and counties.

“The forecast suggested we might be receiving up to another $2 million to $2.5 million,” said Elgin. “That never happened. The smaller communities are being subsidized by the larger communities quite a bit.”

Iowa City's $6.6 million from the road-use tax fund “does not fully cover our needs,” said Public Works Director Rick Fosse.

So he drew about $87,000 from a reserve fund that's nearly tapped out. Established by the city decades ago, the reserve fund was built up with unused surpluses from the city's road-use tax fund allocation, but “there's been no good years in recent memory,” Fosse said.

“That fund balance has been declining for a number of years now” and will be $49,100 at the end of the present fiscal year, Fosse said. “We're one snowstorm away from going in the red.”

Although local officials agree the current road-use tax fund formula doesn't meet their communities' needs, they're reluctant to change it much.

“Any other way you cut the pie, you begin to favor one city over another,” said Fosse. “We favor continuing to divvy it up by population.”

Mary Beth Mellick, legislative liaison for the Iowa State Association of Counties, said the association has no interest in changing the distribution formula, either. Instead, Mellick said, the association favors an increase in the gas tax.

State Sen. Tom Rielly, D-Oskaloosa, chairman of the Senate Transportation Committee, is pushing for an increase of 8 to 10 cents. At current consumption levels, a 1-cent increase would generate about $22 million in additional revenue each year, an estimate subject to change because of fluctuations in the economy and travel patterns.

An 8-cent increase distributed under the current formula would mean an additional $600,000 for Linn County's $10 million roads budget, Elgin said.

The new Urban County Coalition, a state Capitol lobbying effort representing Linn, Johnson, Black Hawk and Scott counties, favors a gas-tax increase over tinkering with the formula, said Linn County Supervisor Ben Rogers.

“We're not advocating for a specific amount; we're just saying that, given the challenges, we do advocate a gas tax increase,” said Rogers, D-Cedar Rapids.