Branstad signals willingness to approve 10-cent Iowa gas tax hike

DES MOINES - Gov. Terry Branstad on Monday gave a strong signal that he would approve a 10-cent per-gallon increase in the state's gas tax if the split-control Legislature can get a bipartisan agreement to his desk that would generate $215 million annually to address critical road and bridge improvements.

Asked during his weekly news conference if he would sign bills that have cleared House and Senate subcommittees, Branstad responded 'yes.” Both of those measures, which are slated to get full committee consideration this week, proposed to hike the state tax by 10 cents a gallon for gasoline and diesel fuels. The increase would take effect on the first day of the month following the month of enactment.

Currently, the state's per-gallon gas tax is 19 cents for ethanol-blended gasoline, 21 cents for regular gasoline and 22 cents for diesel fuel.

In follow-up questioning, Branstad - who said he has held five private meetings with top House and Senate leaders from both parties on transportation funding - clarified his position by saying he would reserve judgment on affixing his signature until he had a chance to review whatever bipartisan compromise could make it to his desk.

'I do support providing additional funding for the road use tax fund,” said the six-term GOP governor who previously approved state gas-tax hikes in the 1980s, including the last increase that took effect in 1989.

Branstad he was optimistic he and lawmakers will be able to 'work in good faith” to find a bipartisan solution to generate more money to infrastructure upgrades this session and he hoped approval would come soon before the issue gets caught up in negotiations over budget and other priorities that don't get resolved until the session's waning days.

'I'm not going to predict what the exact language in the bill would be because I do expect there will probably be some amending through this process. I never make a final decision on bills until I see them,” the governor said.

'We're optimistic that it will get approval and hopefully in the near future,” he added. 'I've made it clear that I'm interested in seeing something approved that will provide the needed funding we need for the transportation infrastructure of the state.”

During last week's subcommittee meetings, representatives from farm, construction, business and labor groups were supportive of the House and Senate bills that also boosted the excise tax on aircraft fuel two cents, increased single-trip permit fees and proposed other changes along with a 10-cent gas tax increase.

However, representatives of Iowa's truck stops and convenience stores warned the spike in Iowa's taxes would make their businesses uncompetitive with neighboring states and should be phased in to mitigate the sting of a 10-cent jump upon enactment.

Raising the state gas tax also was opposed by Iowans for Tax Relief, whose chairman David Stanley will present 'How You Can Stop a 45 Percent Increase in Your Gas Tax,” from 4 to 5 p.m. Feb. 19 at the Coralville Public Library. ITR and Americans for Prosperity launched a 'Stop the Gas Tax” online petition drive in favor of a constitutional amendment that would dedicate 3.5 percent of the other taxes already collected by the state for road and bridge projects. It's not just the 10-cent tax increase that would cost a typical Iowa driver an additional $60 to $80 a year, according to ITR, but the additional cost of goods they buy because of higher transportation costs.

Paul Trombino, director of the state Department of Transportation, said the legislative package would generate enough revenue to address the $215 million annual shortfall in addressing critical infrastructure needs. He also refuted claims that the proposed gas tax increase would make Iowa uncompetitive given that every bordering state but Missouri also is looking at ways to raise transportation revenue that include higher gas taxes.

During last week's subcommittee discussions, Rep. Josh Byrnes, R-Osage, chairman of the House Transportation Committee, said all other options had been explored and exhausted, and the time had come to increase Iowa's gas tax for the first time in 26 years.