Iowa gas tax increase may still be a possibility

Lawmakers on both sides say window hasn't closed on 10-cent increase over three years

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March 28, 2014 | 1:27 pm

Despite a lack of optimism from other legislative leaders, the chairmen of the House and Senate Transportation committees haven’t given up on increasing the state motor fuel tax.

Over the weekend, Senate President Pam Jochum, D-Dubuque, said on Iowa Press that she didn’t know if the proposed 10-cent increase was “completely dead,” but she wasn’t optimistic of getting bipartisan majorities in each chamber to pass the first increase since 1989.

However, Transportation Committee Chairmen Rep. Josh Byrnes, R-Osage, and Sen. Tod Bowman, D-Maquoketa, believe the window hasn’t closed on a plan to phase in a 10-cent increase over three years to raise revenue to meet the growing backlog of transportation needs.

Finding bipartisan agreement on the gas tax may not be the biggest obstacle, they said. The key is agreement between the GOP-controlled House and the Democratic-controlled Senate on property tax relief.

That’s because Gov. Terry Branstad has made clear a condition of his support for the gas tax is lowering Iowans’ overall tax burden. He repeatedly has voiced support for a pay-as-you-go system for funding transportation and calls the gas tax a “user fee” paid by those who use the roads. However, Branstad also said he also want to “make sure we can tell Iowans their taxes are going down.”

If lawmakers can agree on a property tax relief plan, Bowman said, Branstad “ought to be leading the charge for the gas tax.”

If there is property tax agreement, Byrnes predicted a gas tax could be approved “at break-neck speed.”

Byrnes and Bowman said the current revenue generated by the motor fuel tax doesn’t meet current needs.

Byrnes pointed out that counties are selling bonds to cover the costs of repairing roads, a strategy that will prove costly in the long-run. At current costs, Byrnes said, the interest on the bonds alone is costing $200 per taxpayer per year.

“In many cases, the overlays they’re selling bonds to finance will be worn out before the bonds are paid,” he added.

A broad coalition of groups, including farm commodity groups and truckers, has called on lawmakers to raise the motor fuel tax. The condition of roads and bridges is costing them more money than the cost of a fuel tax increase, according to a transportation research group that joined them at a Statehouse news conference last week.

Its data showed vehicle operating costs, traffic congestion and safety issues are costing Iowans $1.9 billion annually or $1,400 a year for a typical Des Moines driver.

“It’s a matter of pay me now or pay me later,” Bowman said. “Waiting is going to cost us more.”

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