Iowa Governor Terry Branstad has made the decision to not support recommendations made by the Transportation 2020 group. These changes include an eight to ten cent gas tax increase and an increase in other fees to generate revenue for road repairs during the 2012 legislative session. Without the support of the Governor on this issue, it is unlikely that enough votes from Senate and House Republicans will be secured to pass the bill.
Instead of an increase in the gas tax, the Governor has asked the Department of Transportation to look for nearly $50 million in savings over the next year, through reduced administrative costs and duplication at all levels of state government. This would be the equivalent of about two cents of fuel tax revenue. The Governor acknowledges the need for additional revenue to support repairs for the state's highways, but stated that funding should come from increased efficiency in highway programs before the state increases taxes. He wants to ensure that current tax revenue received from fuel taxes is being spent appropriately before an increase is implemented.
There are several factors that have led to annual shortfalls in revenue to maintain the road system including:
- Decrease in federal funding;
- The state gas taxes haven't been increased since 1989;
- Vehicles are more fuel efficient today than they were when the gas tax was last increased and consumers are leading towards purchase of these fuel efficient vehicles; and
- An increase in the costs to repair old roads and construct new roads.
Even though it is unlikely to see an increase in fuel taxes during the next legislative session, the issue is will likely be revisited by those in favor of it in the 2013 session
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