Iowa looks at raising the state gas tax, implementing innovative charge system

Commission gathers to attempt to fill $215 million annual hole in transportation funding

June 17, 2011

The state of Iowa has done everything but raise the state gas tax to improve the financial environment for road and bridge construction. So, logic says the only thing left to do is increase the charge at the pump.

After raising vehicle registrations and other fees to help soothe a transportation budget shortfall—which still stands at $215 million annually—the Governor’s Transportation 2020 Citizen Advisory Commission gathered on June 17 to discuss a future path to take. Commission co-chair Nancy Richardson said there was a good chance that raising the gas tax for the first time since 1989 could go a long way at filling the budgetary hole. She pointed out each penny increase per gallon raises $23 million in revenue a year and only costs motorists $4.75.

However, the commission also is looking at alternative forms of funding to help account for the increase in fuel-efficient and electric cars out on the roadway.

“We need to make sure that all of those that use our transportation network pay a fair share toward it,” said Iowa Gov. Terry Branstad.