Alternative Funding Approaches for Iowa Roads TR-790

(2022) Alternative Funding Approaches for Iowa Roads TR-790. Transportation, Department of

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Abstract

The purchasing power of Iowa’s primary transportation revenue source, the fuel tax, has decreased over time due to annual fuel tax revenues not keeping pace with the growth in costs. This study evaluated Iowa’s existing transportation funding sources and through a literature review, identified approaches being used around the country to increase transportation revenues. These approaches included indexing fuel taxes and registration fees to an index; implementing fees to reflect emerging mobility and technology trends; and the continued research of mileage-based user fees. Based on an evaluation of potential approaches to increase transportation revenues, short term recommendations to supplement Iowa’s existing revenues included: indexing existing fuel tax and registration fees to the consumer price index or a construction cost index; implementing a fee on e-commerce deliveries and a fee on trips using transportation network companies; and implementing an agricultural fee to offset the wear and tear on rural roads and bridges caused by agricultural vehicles and equipment. The long-term recommendation is to continue to monitor the development of a mileage based distance fee or mileage and weight based distance fee research around the country and to pursue a federal grant to conduct a pilot study.