Iowa's gas tax revenue slumps as EVs gain momentum
Add Axios as your preferred source to
see more of our stories on Google.
Iowa's gasoline taxes are making up a smaller share of the state government's revenue, according to new data from the U.S. Census Bureau.
Why it matters: The collections help pay for critical road repairs, which have faced millions of dollars in annual shortfalls for years.
- Iowa last year launched a new electric vehicle tax of $.026 per kilowatt hour at public charging stations to help offset the decline of fuel tax revenue as the EV market grows.
Stunning stat: Iowa's motor fuel tax revenue was just over $601.2 million last year — that's down 16%, or more than $108 million, from 2022 and the lowest amount collected since before the pandemic, per census data.
- The tax generated just over $684 million in 2019.
Meanwhile, the state's Legislative Services Agency estimates Iowa's electric vehicle tax will collect $160,000 in its first fiscal year that ended last month.
The big picture: Other states and Congress are taking note of the looming struggle to replace gas tax revenue as fossil fuel usage declines in the renewable energy transition.
- Republican states are leading the way in charging higher EV taxes and it's prompting pushback from industry groups and drivers, the Wall Street Journal reports.
Go deeper: Iowa's elusive electric mile