Iowans, like the rest of the nation, have been in stay-at-home mode for the better part of the last three months.
People, except for those deemed as “essential employees”, are traveling less, and as such don’t gas up as often.
The latest figures from state revenue officials shows Iowans purchased nearly $50.1 million [$50,137,158] worth of fuel in April 2020. That is nearly 10.4 percent – or about $7.2 million – less than during April of 2019 when $57,351,798 of fuel was sold.
March fuel tax collections were also down sharply, from $50.987 million in 2019 ago to $47.784 million for March of 2020.
For the two months – March and April of 2020 – fuel tax collections were down $10 million from year-ago numbers; fuel tax collections for March and April of 2019 totaled $108.834 million for the 60-day period.
During March and April of 2020, fuel tax collections totaled nearly $97.462 million. That is a difference of nearly $10.88 million in fuel revenue collections for the same 60-day period from last year to this year. That’s $10.88 million LESS than last year.
Taxes vary by fuel type
For every gallon of vehicle fuel purchased – depending upon the fuel type – 30.7 cents per gallon is set aside in fuel tax. Fuels with alcohol generate 29 cents per gallon in taxes. E-85 fuel taxes also are 29 cents per gallon. Diesel fuel taxes are 32.5 cents per gallon, while aviation fuel taxes range from five cents to eight cents per gallon, depending upon fuel type.
With Iowans spending less on gas, that means the pool of money coming back to Iowa’s 99 counties for road projects, money to the state, money for key country roads, and money to the cities also is down. Some experts say tens of millions down.
Ask a county secondary roads department employee what that means. Or a state DOT employee, or officials from Iowa’s large and small communities.
At the county level, money for deteriorating bridges and conditions on the Farm-to-Market (FTM) roads are at stake.
In short, if needs are unmet – less money collected from fuel taxes – the movement of agriculture traffic and other vehicles across FTM roads and bridges suffer. Less money coming in hampers not only local economies but regional and statewide economies as well.
Cities also have similar issues: deteriorating pavement conditions, deferred maintenance and the inability to plan for new or expanded roadways.
Iowa Road Use Tax Fund
Money from fuel taxes is deposited into what is known as the Iowa Road Use Tax Fund – or the RUTF.
Of the money deposited into the RUTF, the money is split four ways, after funding for the state patrol: the state, the counties, farm-to-market roads, and cities.
About 47.5 percent of the money goes toward the state’s primary road system.
Another 24.5 percent of the money is split between the 99 Iowa county secondary roads departments.
Eight percent is set aside for Farm-to-Market county road construction projects, while the remaining 20 percent of the funds goes to Iowa communities for city streets.
Here is where the census information is vital. Communities with a population of more than 5,000 residents get a larger piece of the fuel tax pie. For Winterset, that means over $660,000 per year.
Note that while the state doles out money monthly, payments run one month behind.
A fiscal year runs from July of a given year through the following June.
Madison County received $3.993 million in fuel tax money during the 2018-19 fiscal year.
With one month remaining in the present (2019-20) fiscal year, Madison County has received nearly $3.816 million.
While that is less than a $250,000 difference – with the county awaiting the final payment from the state for the year – appears that fuel tax proceeds will end up bringing in a lot less money for the county than it did last year.
With rock for roads running $10 per ton, rock would be one of the first budget items to be impacted. The county rock budget is over $3 million.
Earlier this year, Madison County Engineer Todd Hagan sounded the alarm, stating that the state’s fuel tax collections appeared to be running at least $50 million under “normal”.
Divide that by 99 counties, and that’s nearly $500,000 per county.
A half million dollars is a lot of money. And in tough economic times, numbers magnify in a hurry.
Rock for the county’s rural roads could also become a casualty of the pandemic.