Iowa fuel tax talk underway

By Keith Goble, Land Line state legislative editor | Monday, January 16, 2012

A possible fuel tax increase is expected to get strong consideration at the Iowa statehouse in the coming months. However, Gov. Terry Branstad does not appear to be supportive of any effort to immediately charge more at the fuel pump.

Spurred by the recommendation of a citizen task force, a bipartisan effort is underway in Des Moines to improve roads and bridges throughout the state via a fuel tax increase.

The governor’s Citizen Advisory Commission voted in fall 2011 to endorse a proposal to increase the state’s fuel tax rates by 8 to 10 cents per gallon. The rates have not changed since 1989.

The 16-member panel was responsible for coming up with transportation funding options to help the state cope with an annual budget shortfall estimated at about $220 million. The group’s vote followed two months of gathering input from the public about possible funding methods to pay for needed improvements and repairs to roads and bridges.

Sen. Tom Rielly, D-Oskaloosa, and Rep. David Tjepkes, R-Gowrie, have proposed legislation they say would cover the annual shortfall. They want to increase the state’s fuel tax rates by 8 cents over two years and charge an extra 1 percent in new vehicle registration fees.

It is estimated that each penny added to the state’s 21-cent-per-gallon gas tax and 22.5-cent-per-gallon diesel tax would generate about $22 million in revenue. The 1 percent vehicle fee would bring in an estimated $50 million.

The bipartisan effort calls for fuel taxes to increase four cents in 2013 and another four cents the following year.

Branstad has said he will not support a fuel tax increase this year. Instead, the governor said he believes cost savings elsewhere are the first priority.

According to the panel’s report, in seven public meetings held across the state last summer 90 percent of the verbal or written comments support increasing additional funding for Iowa’s roads and bridges. Nearly two-thirds supported increasing the state fuel tax rates. Of those in favor of an increase, about 33 percent were in favor of a 10-cent hike.

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