Iowa House transportation chair still sees opportunity for gas tax increase

Committee chair proposes cutting state’s per-gallon fuel tax, bump fuel wholesalers' sales taxes

James Q. Lynch
Published: March 19 2014 | 5:07 pm - Updated: 1 April 2014 | 9:52 am in

The chances of a gas tax increase landing on the governor’s desk this year is a lot like the Iowa State University Cyclones’ chances of winning the NCAA tournament, according to the legislator leading the charge for a motor fuel increase.

“There’s a chance and a lot of people are pulling for them and it would be a really nice victory,” said House Transportation Committee Chairman Josh Byrnes, R-Osage, who’s working on his doctorate at ISU.

And the odds of winning approval of a state gas tax increase for the first time since 1989 are improving now that the deadline for candidates to file for legislative offices has passed, he said.

Incumbents, who now know whether they face primary opposition, may be more inclined to listen to the arguments for raising the tax to address the state’s infrastructure backlog, which the Iowa Department of Transportation pegs at $215 million a year.

Add to that the potholes drivers are encountering as the ground thaws and Byrnes thinks his colleagues are beginning to feel pressure to take action sooner rather than later.

“We’re at a point where I can hope to get people moving” toward supporting his proposal, Byrnes said Wednesday.

He’s also been busy doing “background work” on the proposal, addressing individual lawmaker’s concerns about specific transportation-related issues in their districts.

“Some of them tell me ‘I’ll support it if the DOT does this or that,’” Byrnes explained.

If there is action, he doubts it will be on his original plan to raise the tax by 10 cents a gallon over three years.

Instead, he’s proposing to cut the state’s per-gallon fuel tax but bump sales taxes on fuel wholesalers. Every 1 percent increase in the wholesale tax would bring in $47 million compared to $22 million raised by every 1-cent increase in the pump price of fuel, Byrnes said.

If the state had taken that approach in 1989, Byrnes said, Iowa would have collected $3 billion more than it has in the past 25 years.

“We probably wouldn’t need to raise the gas tax now if we had done that,” he said.

Another factor in winning support is a proposal by DOT Director Paul Trombino to “buy out” federal transportation construction funds received by counties. Often there are strings attached to those funds that can increase the cost of projects.

“Because of its staff and resources, the DOT is better situated to deal with those regulations,” Byrnes said. “So the DOT would essentially swap out federal dollars for state dollars. We think we can get more projects done that way.”

 

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