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Federal COVID-19 relief funds will help offset Iowa fuel tax losses

Federal COVID-19 relief funds will help offset Iowa fuel tax losses

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Federal COVID-19 relief funds will help offset Iowa fuel tax losses

CEDAR RAPIDS — The Iowa Transportation Commission has approved using nearly $122 million in federal COVID-19 relief funds to make up for lost fuel tax revenue over the past year and to pay for trail development across the state.

The Department of Transportation recommended the $121.9 million be allocated according to a similar formula used for the Road Use Tax Fund, with the DOT receiving 47.5 percent, counties 32.5 percent and cities 20 percent. Using that formula, $55.5 million will go to the primary road fund, $28.6 million to the secondary road fund, $23.4 million to the city street fund and $9.4 million to farm-to-market roads. The final $5 million is set aside for a statewide trails program.

The DOT’s portion of the money will be made available for the commission to include in its fiscal 2022 revenue forecast as it develops the 2022-26 Highway Program, according to Stuart Anderson, director of the DOT’s Planning, Programming and Modal Division.

The federal funds, which were approved in December, will offset lost state revenue and allow the commission to proceed with its program without reductions, Anderson said. The commission may be able to add some work in because of this additional funding.

The DOT estimates that through June, there will be about a $50 million reduction in state road funding due to COVID-19, Anderson said.

In an effort to get funds to local jurisdictions faster, the DOT recommended using the Federal-Aid Swap Policy. It will allow cities and counties to get their shares of federal funding from the Primary Road Fund, which would then be reimbursed with federal dollars when those are allocated.

For the trail spending, the DOT will solicit applications for trail projects and the commission will do a one-time award this summer, funding specific projects.

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