Budgeting and Appropriations | Annual budget; fiscal year begins July 1. |
Bonding or Pay-as-You-Go | The state uses pay-as-you-go financing. |
State-Level Funding Provided for DOT Budgets | FY 2011 (approved): $643.2 million* |
Allocation of Federal Transportation Funds to the DOT | Federal transportation funds flow directly to the Iowa DOT from the U.S. DOT with no state legislative involvement. Federal funds, especially for highways, are incorporated into the funding estimates in the Five-Year Transportation Improvement Program, which is approved by the Transportation Commission. |
Allocation of State Transportation Funds to the DOT | Some state transportation funds-mainly those from registration fees and fuel taxes-flow directly to the Iowa DOT from revenue sources with no state legislative involvement. These funds are allocated according to formulas in state statute and are used as programming funds for highway projects, subject to approval by the Transportation Commission. The General Assembly appropriates funds for other modes such as transit, rail and aviation, either through project-specific earmarks or at the program or category level. The Iowa DOT operating budget also must go through the General Assembly and be approved by the governor each year. |
Traditional State Funding and Finance for Highways | Fuel taxes (variable excise tax based on a distribution percentage; see Iowa Code Ann. §452A.3); vehicle registration/license/title fees; interest income; underground storage tanks fees; special plates; miscellaneous other permits. |
State Funding and Finance for Other Modes | Transit: Motor vehicle/rental car sales taxes; vehicle registration/license/title fees; use tax on mobile homes, manufactured homes and certain leased vehicles; casino taxes. State Transit Assistance is allocated by formula to transit agencies (Iowa Code Ann. ch. 920). Rail, aviation and recreational trails: State infrastructure funds, primarily from wagering taxes paid by casinos and revenue bond proceeds. Ports: Specific appropriations. Bridges: Included with highways; also a one-time allocation from revenue bonds. |
Innovative Transportation Funding and Finance | State infrastructure bank (federally capitalized); tapered matching. Traffic camera fees are used only at the local level. |
Dedicated/Restricted State Funds and Revenues | The state constitution restricts use of all motor vehicle registration fees and all licenses and excise taxes on motor vehicle fuel, except cost of administration, to construction, maintenance and supervision of public highways (Iowa Const. art. VII, §8). The Iowa DOT is funded primarily by the Road Use Tax Fund, the Primary Road Fund and the TIME-21 Fund, which are defined and allocated according to Iowa Code Ann. ch. 312, ch. 312A and ch. 313. The Transportation Commission is required to use a major portion of its annual budget on commercial and industrial highways (Iowa Code Ann. §313.2A). State Transit Assistance funds are dedicated in statute to transit systems (Iowa Code Ann. ch. 920), and the State Aviation Fund to aviation purposes (Iowa Code Ann. §328.56). Restrictions on specific appropriations are included in session law. |
DOT Authorized to Retain Surplus Funds | Yes. Aside from statutory distributions to local entities, the Road Use Tax Fund and Primary Road Fund are allocated to the Iowa DOT in their entirety each year-either through statutory formula or appropriations-for road and highway purposes. Generally, any unspent balances remain in these funds. Funds that remain in the Road Use Tax Fund are re-distributed by applicable statutory formulas; funds in the Primary Road Fund remain available to the Iowa DOT for use on eligible projects, subject to approval by the Transportation Commission. Any unexpected revenues are typically allocated to current projects with approval the Transportation Commission after receipt. For funds that are appropriated by the General Assembly for Iowa DOT operating expenses, the Iowa DOT may keep half of any unused balance to be used in the next fiscal year for employee training and technology enhancement; otherwise, the money reverts to the respective funds and goes through the normal distribution process. Multimodal projects typically are funded by Iowa DOT grants drawn from non-road infrastructure funds and approved by the Transportation Commission; these funds are appropriated separately from road-related funds and the reversion date usually is four years. In the unusual case that grants for the total appropriated amounts are not made within four years, the Iowa DOT must apply to the General Assembly for an extension through the budget bill. Otherwise, the money reverts to the respective funds. |
Legislative Approval Required to Move Funds Between Projects | Yes, but only for projects that received specific allocations or appropriations through the General Assembly in session law, which happens rarely. Otherwise, approval is through the Transportation Commission. |
Transportation Funding Allocations through Local Aid | Cities and counties receive funding from both the Road Use Tax Fund and the TIME-21 Fund by statutory formulas. The Road Use Tax Fund, after set-asides, is distributed to the Secondary Road Fund for counties (24.5 percent), the Street Construction Fund for cities (20 percent), the Farmto-Market fund, which is also used by counties for specified roads (eight percent) and the Primary Road Fund for state use (47.5 percent) (Iowa Code Ann. §312.2). Of the Primary Road Fund, 1.75 percent goes to the Transfer of Jurisdiction Fund and then is distributed to cities and counties, primarily for roads that formerly were under state management (Iowa Code Ann. §313.4). The TIME-21 Fund was created by 2008 Iowa Acts, Chap. 1113, which altered the structure of road funding in Iowa and caused a portion of registration fee revenues and increases in truck and other vehicle fees to flow into that fund. The TIME-21 Fund also is allocated to the Secondary Road Fund for counties (20 percent), the Street Construction Fund for cities (20 percent) and the Primary Road Fund for state use (60 percent) (Iowa Code Ann. §312A.3). The Secondary Road Fund for counties and the Farm-to-Market Fund are allocated according to a methodology developed under Iowa Code Ann. §312.3C; money that comes to the Secondary Road Fund through the TIME-21 Fund must be used for bridge projects and farm-to-market highways (Iowa Code Ann. §312A.3). The Street Construction Fund for cities is allocated by a statutory formula based on population (Iowa Code Ann. §312.3). Local entities also receive state legislative appropriations and discretionary grants approved by the Transportation Commission. |