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December 2013 Policy Study, Number 13-10


Fuel Tax:  What Is a Fair System for Iowa?


Problems With Funding Source



Now that you have a little background in how the state collects the money to pay for our road construction, it is important to look at the problem that is causing the uproar in whether or not we need to increase the fuel tax along with other potential cost increases to you, the taxpayer.


As the Iowa Department of Transportation examined changes that were developing with the funding stream, there were several red flags that they felt needed to be discussed. They felt that these issues would have a significant impact on the funding stream over the course of time. These are some of the same concerns that led to the creation of the TIME-21 fund.


• Impact of inflation
• Instability of federal funding
• Impact of alternative fuel vehicles
• Increasing fuel efficiency[22]


The 2011 RUTF Study projected that over the next twenty years there will be a total funding shortfall of $32.5 billion to meet current and future needs of all Iowa roadways.[23] Additionally this study pointed out the critical funding needs, which address the “most critical pavement and bridge preservation needs that exist on Iowa’s Interstate system, Commercial and Industrial Network, Farm-to-Market Network, and key city streets,” is $4.3 billion over the same 20 years and breaks down to $215 million per year in state funding shortfall, which we are hearing about repeatedly in the media.[24]




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