Iowa DOT expects project delays after gas tax brings in less funding during slower pandemic travel

Published: Sep. 28, 2020 at 4:22 PM CDT
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CEDAR RAPIDS, Iowa (KCRG) - After nearly seven months of COVID-19 restrictions, fewer drivers have taken to Iowa’s roadways, which, in turn, means fewer people at the pumps and less funding for road construction through the gas tax.

Work to improve the interchange between Interstate 380 and Interstate 80 in Johnson County will now take more time. That’s after funding the Iowa Department of Transportation uses for road projects like the new interchange took a hit due to the pandemic.

“Starting back in March we saw as much as 40% of the traffic go down,” Cathy Cutler, a transportation planner with the Iowa DOT said. “People were working from home, kids were at home and people weren’t going out, so that all effects the revenue that comes into the DOT.”

The DOT’s main source for money for road work comes from what’s called the Road Use Tax Fund, which is funded through a gasoline tax. Iowans commonly fill up with an ethanol blend that’s taxed at $0.29 per gallon. The DOT planned on bringing in over $660 million dollars for the 2020 fiscal year from that tax, but not now.

“So, there is a federal gas tax as well as a state gas tax, both of those are down, so that effects the DOT overall budget,” Cutler said.

Cutler said the Interstate 80/380 interchange is the biggest project slowed-down by the funding decrease.

“We were going to have a huge letting in July, but just due to funding and cash flow, we’ve moved that to December. That has a net impact of actually adding a year onto that project, so it will now go into 2024,” Cutler said.

Cutler said the average number of drivers on the road has come back up since the pandemic related shutdown. She anticipates gas tax funding will only cause delays on other projects and not cancelations.

“They’ve actually came back, so they are only down about 10 percent right now, so we have fully much fully recovered,” Cutler said.

The city of Cedar Rapids is not yet sure how the funding decrease projects around the city.

“The State of Iowa projections for road use tax continue to improve, but it is still too early to know if this will continue. As businesses continue to open we should see streets local option sales tax revenues increase as well,” the city’s finance director said, in a statement.

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