Des Moines Register: Iowa Fuel Tax Hits Low
media mentionBy Jason Noble, May 10, 2014
“Iowa is one of 10 states in which fuel taxes have hit an inflation-adjusted “all-time low,” according to a report issued last week by a Washington think tank.
The state’s current 19 cents per gallon tax on fuel has been in place since 1989. Inflation over that time, though, has eroded its value so that it’s now worth roughly half as much as the state’s historical average for the fuel tax, which is used exclusively to pay for transportation infrastructure.
Back in ’89, 19 cents was worth the same as 36.4 cents today, meaning the value of the revenues raised from the tax have declined more than 17 cents — or about 48 percent over the last 25 years. Iowa’s inflation-adjusted historical average for the fuel tax is 37.9 cents, meaning the current tax is 50 percent below average.
The numbers come from the Institute on Taxation and Economic Policy, a nonpartisan group focused on “tax fairness and sustainability” and was released just days after the adjournment of the Iowa Legislature’s 2014 session, in which a handful of lawmakers and interest groups tried but failed to increase the gas tax.”