Study finds Iowa Biofuel Standards legislation will grow state economy, boost tax revenue
A study released mid-February finds the Iowa Biofuel Standards legislation will support thousands of new Iowa jobs and hundreds of millions in new household income over the next five years, while boosting state and local tax revenue.
The study, authored by John Urbanchuk of ABF Economics and commissioned by the Iowa Renewable Fuels Association, found the Iowa Biofuel Standards bill, HSB 185/SSB 1179, will support more than 3,500 new jobs and generate nearly $550 million in household income by 2026. It will also add over $450 million to Iowa’s GDP, which in turn generates an estimated $182 million in new state and local tax revenue by 2026. The study expects the benefits to continue to increase after the five-year period analyzed in the study.
“If you look at it from a state of Iowa standpoint, from a consumer standpoint, from a taxpayer standpoint, this is a really good piece of legislation,” said Monte Shaw, IRFA executive director. “The Iowa Biofuel Standards will boost farm income and support thousands of jobs while generating millions in tax revenue to help with Iowa’s economic recovery. The standards bill will create stable market demand for Iowa farmers and biofuels producers right here in Iowa, provide retailers with the resources they need to upgrade infrastructure to offer higher biofuel blends, and give consumers greater access to cleaner, lower-cost fuel options. It will do all of this while also adding to the bottom line of both Iowa families and the state’s general fund. It’s a win all the way around.”
Gov. Kim Reynolds introduced the bill into the Iowa Legislature in early February to establish biofuel standards for fuel sold across Iowa and provide Iowa retailers with increased funding to upgrade infrastructure to offer higher blends of ethanol and biodiesel. The bill sets a 10 percent minimum ethanol standard for gasoline fuel and an 11 percent minimum biodiesel standard for diesel fuel. Both standards have limited exceptions. The biodiesel standard would step up to 20 percent biodiesel blends during the summers beginning in 2024. The governor would have the discretion to increase the ethanol standard to 15 percent blends beginning in 2025.
The bill also budgets $5 million from Iowa’s general fund for the Iowa Renewable Fuels Infrastructure Program on top of $5 million from the separate Rebuild Iowa Infrastructure Fund called for in the governor’s budget proposal. RFIP is a public-private partnership that provides cost-share grants for retailers to upgrade fueling equipment to offer higher biofuel blends. The bill also contains reforms to existing biofuels tax credits to more than offset the increase in RFIP funding, leaving tens of millions of additional tax dollars in the state’s general fund over the next five years.
Click here to view the full study.