Iowa adopts 10-cent hike in gas tax — first increase in 26 years

Iowa became the first state in the Midwest this year to approve a plan to raise taxes for roads, but it may not be the last. According to The Des Moines Register, Iowa’s SF 257 increased the gas and diesel tax by 10 cents (to 31 cents for gas and 22.5 cents for diesel). It will bring in an additional $215 million annually for city, county and state roads. The gas tax in Iowa hadn’t been raised since 1989; the new rates took effect March 1.
Meanwhile, during the final days of its 2015 session, the South Dakota Legislature was considering a proposal to increase the gas tax by 2 cents annually. Different proposals called for that yearly increase to take place with no statutory end date, or over a set period of time: 15 years, eight years or three years, depending on the proposal. (A final decision on the gas tax increase had not been made as of early March.) The state’s current tax on gasoline and diesel is 22 cents per gallon.

In May, Michigan voters will decide the fate of a legislative proposal to increase transportation funding by $1.2 billion a year. If approved, the plan would increase the state’s general sales tax (by 1 cent), raise vehicle-registration fees, and establish a wholesale gasoline/diesel tax (in place of the per-gallon tax).

Stateline Midwest - March 20151.65 MB