 Todd DormanTodd Dorman is a columnist for The Gazette. His blog has been bringing smiles to readers' faces since November 2007. |
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The untouchable Road Use Tax formula
I guess we should consider ourselves lucky that road repairs in Iowa are not funded by a tax on political courage. We wouldn’t have enough pennies to fill a pothole.
Fragile efforts to ignite a gas tax debate in the 2013 Legislature will flame out if urban lawmakers try to inject a rewrite of the formula for distributing road-use tax fund revenues into the mix, backers and skeptics agree.
With the next election nearly two years away, supporters of increasing the state’s motor fuel user fee – as Gov. Terry Branstad prefers to call it – see the 2013 legislative session as offering a 50-50 shot, at best, to bump up rates for the first time since 1989.
Currently, motorists who fill their tanks at Iowa pumps pay state taxes of 21 cents per gallon for regular gasoline, 19 cents per gallon for ethanol-blended gasoline, and 22.5 cents per gallon for diesel fuel. Each penny increase in the state gas tax would raise $23 million in revenue and cost Iowans about $4.75 in yearly fuel expenditures. Proceeds from Iowa gas tax are distributed via a formula that provides 47.5 percent to the state’s primary road fund for use on interstate highways and state-owned roads, 24.5 percent to the secondary roads, 20 percent to cities, and 8 percent to farm-to-market roads.
A TIME-21 initiative approved several years ago by lawmakers routed new transportation-related revenue from higher vehicle fees to the highway network by distributing 60 percent to the state system and 20 percent each to cities and counties, but capped it at $250 million annually. Now some urban legislators say they would like to revisit the structure of the road-used tax distribution formula as part of a comprehensive review if they are to consider changing the current fee schedule.
Branstad and top lawmakers say that would open an urban-rural split that would stop the issue cold.
“Forget it,” Branstad said in a recent interview, noting that the Iowa Farm Bureau Federation’s key backing for a motor fuel use fee increase would dissipate if road-use tax money for rural areas was lessened at a time when a proliferation of ethanol plants and more value-added processing is creating a greater reliance and stress on Iowa’s infrastructure network. “Are you kidding me? There’s no chance that’s going to happen. It’s going nowhere.”
Maybe, from now on, we should just let the Farm Bureau decide which roads get repaired or constructed. The group is already writing the state’s environmental rules.
Sure, I understand how the Legislature works. Branstad and everyone else in the article who says re-writing the formula would blow up the issue are 100 percent right. You can never go wrong assuming that self-interested politicos will duck tough but necessary calls (see no gas tax increase since 1989), or defend their parochial political interests even if they run counter to the best interests of the state as a whole. So as punditry goes, this is rock solid stuff.
As policy, it’s lousy. It’s true, there is a rural-urban split in Iowa. Iowa’s fastest growing places are urban/suburban and its fastest shrinking are rural. One third of Iowa’s population lives in just eight urban areas. Suburban communities, such as Waukee, North Liberty, Fairfax, Marion, etc. are growing at a remarkable clip.
The state’s most pressing transportation needs have, over time, shifted to those urban/suburban municipalities and the highways that carry people between them. The Road Use Tax Formula should be changed to better reflect those realities.
It doesn’t have to be a massive change. Nobody’s talking about shafting rural areas. TIME 21 is a good start. But it’s irresponsible to raise a tax on Iowans without being willing to even have a discussion about the flawed formula used to spend it.
Sorry. Carved in stone. Farm Bureau, that’s why.
I know the main worry here is that rural interests will withdraw support for an increase. I get that. But I’ve gotta tell you, I’m a lot less excited about paying more for gasoline just to pump more dollars into the outdated formula. There may be other citified Iowans who feel the same way. Maybe we could form Peeved Urban Motorists for Pavement, or PUMP.
I’d still also like to see any gas tax increase tied to an increase in the Earned Income Tax credit to offset at least some of the sting for low-income workers. I also think it would be appropriate to create a mechanism where the added tax is temporarily rescinded if spiking gas prices cross a certain threshold, $4, maybe $4.50, per-gallon.
And maybe nothing at all will happen. The governor can’t even seem to decide whether he’s for or against an increase. I wonder if we could enact a kicking-the-can-down-the-road use tax?
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The law should be amended to read that gas tax revenue money must be used for its intended purpose as well. Currently there is no such requirement.
Todd, you can do better! First of all the Iowa Farm Bureau repeated environmental facts that ISU agronnomists tell us. Stop planting the seeds of hate and move on!
Second, the idea that Iowa Farm Bureau carries more weight with the Iowa Legislature than the League of Cities or Iowa Chamber Alliance doesn’t make sense if indeed we are an urban state rather than a dying rural state. Perhaps you should read your own papers stories about why/how Iowa survived the last recession better than other states!
Third, what is wrong with the idea of obtaining tens of millions of fuel tax dollars from out of state? Don’t they tax us?
Pointing out that passages included in state regulations were lifted directly from a Farm Bureau publication is hardly sewing seeds of hate. There’s influence, and then there’s dictation. Nobody said this is a dying rural state. I simply said urban/suburban areas are growing while many rural counties are not. That’s just a fact, not some indictment of rural Iowa, where I grew up. I also didn’t say I’m flatly against a gas tax increase. And you failed in any way to address the central premise of what I wrote, which is that the formula should be changed to better reflect the state’s transportation needs. And again, I’m not even calling for massive changes.
“The group is already writing the state’s environmental rules.” This sentence has nothing to do with the road use formula, hence, it is open for interpretation and I would love to hear you explain why its not maliciously there!
And while you’re at it, explain the other remark about “carved in stone”. Farm Bureau has presented its case, but there’s nothing in their policy book about disallowing other discussion – that’s your misguided interpretation. 100 Individual FB county delegates meet once a year to write policy with the information they have at the time.
Our information is that the Chamber Alliance has advanced the idea of dropping state support for secondary roads altogether. Yet Farm Bureau is the devil in farmer’s clothing for not supporting the Chamber’s Time – 21?
“its fastest shrinking are rural” Okay, “dying” was over the top – like you’ve never done that?
Rural areas have become more and more defined by commuters than farmers. As farmers retire, their residences are snatched up by people driving to towns and cities to work, play and shop. Also, rural roads are needed to build and install windmills, communication towers, and utilities such as electical transmission and natural gas pipelines. In Linn County, soccer mom’s need a secondary road to get to our largest soccer complex. And there’s a good chance Linn County’s urban garbage travels a secondary road.
I hope we both agree that secondary roads and bridges could use more financial help. I hope that we can agree on two more things; Stop the mud-slinging, and not putting the cart (Time – 21) in front of the horse (fuel tax).
“Nobody’s talking about shafting rural areas”
Really? Probably because we’re already “shafted”! My wife has had friends turn down an invitiation to visit because we live on a gravel road. A neighbor was declined hospice by a Cedar Rapids “care” firm because of their policy not to drive on gravel roads.
We hear a lot about keeping or attracting people to work in Iowa. But we don’t make an effort to accomodate those who want to live outside the city so they can enjoy things like a machine shop, horses, or simply avoid abrasive neighbors. What those people DON’T want are sloppy, dusty, rutted, drifted in gravel roads so they go elsewhere. Perhaps we should consider that “the fastest shrinking is rural” is due to lousy infrastructure?!
You didn’t get “shafted” by the state if your friend declined your invitation. That’s just a choice your friend made. Same with the policy not to drive on gravel. The road use formula doesn’t seem to affect that policy.
Is it good that some people that live in rural areas have bad roads? No. But if those roads carry far less traffic than urban roads, why shouldn’t urban areas get an appropriate proportion of the funds? They have bad roads, too.
The conversation here is about whether the formula should be adjusted to reflect where people live/drive. I think it should be, however that works out. I wonder if there should even be a discussion about the fuel tax for agricultural use in this. If fuel for farming use were not exempt, maybe that money could pay for road upkeep on farm-to-market roads. I’m not sure if it’s a good idea or not, but it doesn’t seem like there’s even a discussion about it.
( Chuckle ) “. . . my wife has had friends turn down an invitation . . . because we live on a gravel road.” I suspect the “gravel road” was just a convenient excuse ! ( We live on a gravel road and have never had that problem. ) “A neighbor was declined hospice . . . ” If the “care firm” was identified we could contact them and see if that’s indeed their policy. Otherwise: Hearsay.
The problem with a fuel tax on tractors and combines is that they spend most of their time in fields and farmsteads – not roads.