Does Iowa Really Need a Gas Tax?

Senator Randy Feenstra (R-Hull) did some great research on the gas tax in Iowa. He has put it all together and posted it on his website: http://www.newgenerationrepublican.com/. We couldn't have said it better ourselves.

Overview
Iowa’s gas tax is 22 cents per gallon. Currently, Iowa ranks 32nd in total state tax on gasoline. Our state neighbors are as follows:
Missouri 17.6 cents per gallon
South Dakota 24 cents per gallon
Minnesota 25.6 cents per gallon
Nebraska 26.9 cents per gallon
Wisconsin 32.9 cents per gallon
(Total state taxes including other taxes applied to fuel such as sales tax)
The Iowa Democrat party is deliberating about adding 10-12 cents per gallon. If this were to occur, Iowa would jump to one of the top 10 highest states in the nation for gas tax. (dime increase would raise $220 million annually)

What has been done so far?
The Iowa Legislature in the 2007-2008 session realized a possible funding shortage and passed a bill called “Time 21” This legislation called for increasing license fees on all motorized vehicles to offset this shortfall. Its goal was to achieve an extra $200 million in funds annually by 2012. (17.5% increase over 2008 amount)
This will be a significant fee increase for each vehicle owner. ($20-$60) We have not gone an entire year under this new regulation so no one is sure how much of an increase this will have to the DOT. The question arises do we need even more tax money for road building and rebuilding?

What is most likely to occur in 2009?
The federal government is looking to pass an $817 billion dollar stimulus package; Iowa is in line for approximately $1.3 billion of this money. The governor along with Senator Harkin has stated that this money will go toward infrastructure, specifically road infrastructure. If this occurs, the state roads will see some significant improvements, and the DOT short-fall will be immediately wiped out!

Also, the governor is requesting a $700 million dollar bonding package for infrastructure, again, most of this money would go toward new roads or the rebuilding of current roads. Again, this would wipe out the funding shortage.

Finally, the federal government is also talking about a 20 cent per gallon gas tax increase. A portion of this money from the federal government would go back to the state for its roads projects. (Payment to the RUT fund could be over $225 million of additional dollars per year) Another, way to wipe out the funding short-fall.

Remember, if one of these items would occur, Time 21 funding will be more than sufficient to keep up with road projects going forward.

You can read the full article on his blog, just visit his web site. Thank you , Senator Feenstra!