Gas tax hike paying off for state and local road and bridge projects

By Erin Murphy, Lee Des Moines Bureau


DES MOINES ? When they pull into the station and fill up their gas tanks, drivers pay to the state of Iowa 10 cents more per gallon than they did a few years ago.

That gas tax hike has produced an extra $515 million for state and local governments to put toward fixing Iowa?s roads and bridges.

Because of that influx of cash, hundreds of road and bridge construction or repair projects in each of the state?s 99 counties have been added or started sooner than planned, according to data recently compiled by the state?s nonpartisan fiscal and legal analysis agency.

?It?s been a very much needed shot in the arm for us,? Woodbury Co. engineer Mark Nahra said.

A contentious debate preceded the decision in 2015 to increase the state?s gas tax by 10 cents per gallon. The increase was approved by a bipartisan mixture of state legislators and signed into law by former Gov. Terry Branstad.

At the time, the state transportation department said state revenue for road and bridge construction and repair needs was falling short by $215 million each year. Projects were being delayed and multiple ratings indicated the state?s bridges were in poor shape.

The 10-cent increase produced an additional $220 million in the state budget years that ended June 30 of 2016 and 2017, according to the state data.

With the addition of a smaller portion of new revenue from the first few months after the increase was approved, a total of $515 million in extra revenue has been produced by the 10-cent increase since its implementation.

Of that, $245 million has gone to the state road system, $167 million to county roads and $103 million to cities.

Each of Iowa?s 99 counties is adding new projects with the new revenue, according to the state data.

Nearly $100 million was used on 237 critical projects, at least one in every county, during the state budget year that ended June 30, according to state data.

Jon Burgstrum, who is Scott County engineer and also vice president of the Iowa County Engineers Association, said that the county has been able to boost its road and bridge construction spending by 50 percent over the next five years thanks to the new revenue coming in. The upcoming projects, which will cost an estimated $4.3 million, will include replacing two bridges and three large culverts, plus four resurfacing projects.

?So we are seeing more work being done, which is a benefit to Scott County,? Burgstrum said. ?We have added bridge projects to our plan so our older and more deficient bridges are being replaced sooner. We are also resurfacing older pavements sooner. The added work creates a safer and makes drive-able transportation system in Scott County.?

Some county officials said they have been banking some of the early returns on the gas tax increase in order to build up their reserve accounts in anticipation of big, expensive projects on the horizon.

?We felt it was better to let the money come in and build up for a little while so we had money on hand to spend instead of banking on money that might not come in consistently, as fuel tax (revenue) does fluctuate,? Burgstrum said.

In Black Hawk County, supervisors had recently approved roughly $40 million in bonds for road and bridge projects over the previous handful of years, so the backlog there was not as long as other counties. So Black Hawk opted to store up some of the new gas tax revenue, county engineer Catherine Nicholas said.

Black Hawk County has upcoming bridge projects that will cost $1 million and from $5 million to $7 million.

?We have saved a portion of it, let it accumulate in our fund balance because we have several large bridge projects in our five-year plan,? Nicholas said. ?Yes, we receive some federal bridge money and can save federal money for several years, but then you are neglecting all your other bridges as well. We have saved some of our (new state gas tax) money for these projects, the board (of supervisors) has committed to bonding approximately $4 million for the large bridge, but we still need more to pay the large price tag.?

Iowa in recent years has ranked at or near the top of national reports highlighting states with bridge repair needs. The American Road and Transportation Builders Association, for example, published a study this year that said Iowa has the nation?s most structurally deficient bridges, meaning one or more element of the bridge is considered to be in poor condition.

But the new gas tax revenue may be helping local governments address that issue. More than 31 percent of bridges are in line to be repaired or replaced, according to a report published this year by InsuranceQuotes.

?That?s a pretty high percentage ... which I thought was interesting,? Laura Adams, a senior insurance analyst with InsuranceQuotes, told the Cedar Rapids Gazette. ?It means the leadership in Iowa is likely very aware of what?s going on with the state of these bridges and there are proposals to replace them or repair them.?

Some counties have been using the additional gas tax revenue to improve their gravel roads.

Nicholas said Black Hawk County has boosted spending on its gravel roads by $200,000 per year.

?Our gravel road system had been neglected, and that was starting to get critical,? she said.

Woodbury County has taken similar action on its more than 900 miles of gravel roads, spending $300,000 per year of the new gas tax revenue on them, Nahra said. Some of the county?s gravel roads see more than 400 vehicles per day, many of them large farm vehicles, Nahra said.

?Some of those roads take a pretty good beating,? he said. ?This time of year they really take a beating, during the harvest. ... It puts a lot of strain on the roads.?

At the state level, the new gas tax revenue has meant completing work on multiple four-lane corridors, including U.S. 20 in western Iowa, U.S. 30 in Tama and Benton counties, and U.S. 61 in southeast Iowa.

?The (state transportation) commission wasn?t able to fund any of those projects before the fuel tax increase,? said Stuart Anderson, with the Iowa transportation department.

It is unlikely, however, that Iowa?s 2015 state gas tax increase will prevent long-term funding issues for state roads and bridges. As vehicles continue to become more fuel efficient and electric-powered vehicles become more prevalent, gasoline sales will continue to decline, as will revenue from the state gas tax.

Anderson credited Iowa lawmakers for having the vision to include other revenue streams, including vehicle registration fees, in its road funding formula. Still, he acknowledged big decisions likely will have to be made in the future as gas tax revenue declines.

?I think that will be, in the coming years, an item of increased discussion about how to deal with that,? he said.