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Taxpayer Group Vows It Won’t Be Alone in Opposing a Gas-Tax Hike PDF Print E-mail
Commentary/Politics - Iowa Politics
Written by Lynn Campbell   
Tuesday, 24 January 2012 11:51

As momentum builds for a measure to increase Iowa’s gas tax to pay for the state’s roads and bridges, a taxpayer-advocate group is one of the lone voices opposing the plan.

Lindsay McQuarry, policy director for Iowans for Tax Relief – a Muscatine-based not-for-profit that supports reduced state-government spending and lower taxes – said her group won’t be alone for long.

“It is an uphill battle, but it’s something that Iowans are going to be outraged by once this picks up steam,” McQuarry said. “I don’t think this is something that has the support that the special-interest groups would like to lead people to believe.”

A proposal before the legislature would have the Iowa Department of Transportation find $50 million in savings for the fiscal year that begins July 1. The plan would then increase the gas tax by 8 cents a gallon over the next two years, starting in 2013. It would also increase registration fees for new vehicles from 5 percent to 6 percent of the purchase price. The increase would generate about $180 million a year when fully implemented, lawmakers said.

Iowa’s current tax is 21 cents a gallon for gasoline, and 19 cents for ethanol-blended fuel. The tax was last raised in 1989.

Several Republican and Democratic lawmakers have joined cities, counties, economic-development groups, the Iowa Farm Bureau, and labor unions in support of the plan. County officials say the gas-tax increase is a priority, allowing them to provide infrastructure for agricultural services and wind-energy companies.

“Counties have had a real struggle the last several years trying to maintain those roads with the increased vehicle weights that exist on there, when you’re talking about dragging these big wind generators down county secondary rounds,” said Bill Peterson, executive director for the Iowa State Association of Counties, a not-for-profit corporation representing officials from Iowa’s 99 counties. “Our infrastructure on the secondary roads in Iowa was not built for those sorts of equipment.”

Branstad said Monday the anticipated shortfall in money to pay for the state’s crumbling roads and bridges has led him to be more receptive to the idea of a higher gas tax in future years.

“We don’t have a problem this year, and we still have a lot of people out of work and a lot of people that would be burdened by raising the motor-fuel user fee,” Branstad told IowaPolitics.com. “We do recognize in out years, there is a shortfall.”

The governor’s Transportation 2020 Citizen Advisory Commission in November identified a $1.6-billion annual shortfall for transportation infrastructure needs, which includes $215 million a year that’s considered “critical.” The panel recommended increasing Iowa’s gas tax between 8 and 10 cents a gallon.

Branstad initially threw water on the proposal, saying the state must first find cost savings before asking Iowans to pay a higher fuel tax. But as Republican and Democratic lawmakers and interest groups have become louder in their call for increasing the gas tax in future years, the governor appears to have warmed to the idea.

“I happen to think that the most equitable way to deal with that is a user fee, but I also think we have to be cognizant of the people that are going to have to pay that,” Branstad said. “We want to certainly make sure that it’s fair. We want to make sure that out-of-staters that use our roads pay their share.”

McQuarry said people from border states who come to Iowa weekly to buy gas and groceries would rethink their trips and stay home if Iowa had a higher gas tax. She said Iowans are still going to pick up much of the cost. She also questioned whether the roads are as in “such horrible state” as state and county officials would have Iowans believe. “We’re just not seeing evidence of that,” she said.

The potential increase comes as Iowans brace for the possibility of paying between $4 and $5 for a gallon gas this summer, according to some analysts.

“That’s still Iowans’ money and this is still a hard economy,” McQuarry said. “They’re saying that gas prices are going to increase this summer by record amounts, possibly $5 a gallon, across the country. So 10 cents is a big deal to a lot of people, to that person that’s working a minimum-wage job ... . That’s a tax increase that they’re having to pay out of their pocket.”

McQuarry said rather than increasing the gas tax, the state should look at ways for government to be more efficient with money it’s already generating, as proposed by Branstad. She said the state can identify savings from wasteful spending in many areas, although she didn’t know if the state could find $215 million.

Iowa State University economist David Swenson said an eventual 10-cent-a-gallon increase in the gas tax would amount to $32 a year for the average commuter. But McQuarry said she has heard that could be as high as $50.

Democrats said Branstad in his previous terms as governor – from 1983 to 1999 – raised the state’s sales tax from 3 percent to 5 percent, and the gas tax from 13 cents to 20 cents a gallon.

This article was produced by IowaPolitics.com. For more stories on Iowa politics, visit RCReader.com/y/iapolitics.

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