Big Push To Raise Iowa's Fuel Tax

Iowa Farm Scene

Increased revenue is needed to repair roads and bridges, say backers of proposed gas tax hike.

Published on: March 5, 2013
Spiker says his letter was a reminder to Byrnes that the party is against the tax increase. "The Republican Party of Iowa's platform is clear. We do not support an increase in the gas tax."

A fuel tax increase could be phased in over a three-year period
The legislation is still being drafted. One proposal calls for a 10-cent tax increase on gasoline and diesel fuel that motorists would pay at the pump which would be phased in over a three-year period. It would be a 3-cent-per-gallon increase in 2014, 3 cents in 2015 and 3 cents in 2016. Additionally, the legislation may call for extending the formula for determining the tax (which is now set to expire June 30, 2013) for 10 years. Each additional penny of fuel tax is expected to raise $21 million to $23 million a year.

State Sen. Tod Bowman of Maquoketa is a Democrat who chairs the Iowa Senate Transportation Committee. He thinks the bill will need votes from 12 to 14 Republican Senators to get it through the Democrat-controlled Senate. The Republicans have control in the House. Likewise, Byrnes says the bill would have to have bipartisan support to get it passed by the House.

Iowa Gov. Terry Branstad, a Republican, plays a big role, too. Branstad's support of the gas tax increase is conditional, depending on whether the Legislature passes the commercial property tax reform legislation which Branstad wants.

Ag groups list reasons for raising Iowa's fuel tax 10 cents per gallon
The Iowa Soybean Association's board of directors decided raising Iowa's fuel tax was their top legislative priority for the 2013 session. ISA joined ranks with the Iowa Corn Growers Association and Iowa Farm Bureau. Farmers seldom support tax increases of any kind. But there are some compelling reasons why an increase makes sense for farmers, and their urban neighbors, says Carol Balvanz, ISA's policy director.

"The dollars in Iowa's road use tax fund haven't been adequate to keep our roads and bridges properly maintained for several years," says Balvanz. "Increasing the fuel tax is a logical way to fill the gap since it amounts to a user fee for everyone using Iowa's roads, including out-of-state drivers."

That message and other reasons for raising Iowa's fuel tax resonated with over 500 voters surveyed last summer by Public Opinion Strategies, a group hired by ISA and ICGA to conduct the survey. Many of the individuals surveyed changed their minds about supporting an increase in the fuel tax after discussing the situation. "We've been providing this information to legislators during our visits with them, so that they have answers for their constituents who might question their support for increasing the state fuel tax," says Balvanz.

Legislators hear more often from people who oppose any type of tax increase
Still, many legislators are reluctant to vote for a tax increase of up to 10 cents per gallon. Tax issues are frequently cited in election campaigns, Balvanz notes. Legislators hear far more often from those who oppose any tax increase, than they hear from those who might see it as a long-term benefit.