Gas tax fight ahead for 2012 Iowa legislative session

Iowa House and Senate members have plenty of work to do during the next legislative session, scheduled to begin in January 2012. Governor Terry Branstad wants to pass a big education reform package as well as commercial property tax cuts he wasn’t able to get through the legislature this year. Lawmakers also face a deadline for adopting a new system for funding and delivering mental health services. Disagreements over the state budget pushed the 2011 legislative session two months beyond its original adjournment date, and I doubt Democrats and Republicans will find it easier to agree on spending priorities in 2012. Election years aren’t typically the most productive times at the state capitol.  

As if there weren’t enough contentious issues on the table, the governor’s transportation advisory commission will urge legislators to approve an 8-cent to 10-cent gas tax increase.  

Soon after returning as governor, Branstad indicated that he would look favorably on a future increase in the gas tax, which Iowa last raised in 1989. Road funding doesn’t meet current needs for maintenance and repairs. In fact, Iowa is the third-worst state in terms of deficient bridges.

Some business groups pushed for a gas tax hike a few years ago. Key Democratic legislators backed that effort, as did Republican Secretary of Agriculture Bill Northey. However, Governor Chet Culver ended the conversation by threatening in 2009 to veto any gas tax increase.

In January of this year, Branstad told “representatives of highway associations and coalitions, local elected officials, engineers, economic developers and other stakeholders” that he wants to “help in this effort” because increasing road funding is “critically important to our economic development success.” Branstad appointed a Transportation 2020 Citizen Advisory Commission in March, and several of its members had previously supported increasing the gas tax. For instance, Democratic State Senator Tom Rielly chairs the Senate Transportation Committee and sponsored the 2009 bill that Culver threatened to veto.

The 2020 commission set out to find roughly $215 million in additional annual revenue to support road and bridge work. Road builders and other aligned interest groups turned people out in impressive numbers for the commission’s public hearings around the state in August and September (see here).

Yesterday the commission voted to recommend a gas tax increase of 8 cents to 10 cents. O.Kay Henderson reported for Radio Iowa,

[Former Iowa Department of Transportation Director Nancy] Richardson, who led the 16-member citizen advisory committee, says they received overwhelmingly positive comments about the plan during seven public meetings across the state.

“It was interesting being somebody who’s been in this game a long time to have 85 percent of the people say you need more money and then having the vast majority of them, over two-thirds say fuel tax,” Richardson says. “So fuel tax was overwhelming method that the citizens suggested and support.”

Committee member Jim Kersten, a former state senator from Fort Dodge, says the public hearings turned up just one complaint. The rest of those who turned out support the gas tax hike.

“We had Iowans that are involved in economic development, local government,  business come out and say, ‘You know what? We are willing to pay a user fee so we can improve our roads and get our good transported across the country,” Kersten says.

The commission will also recommend a small increase on the tax Iowans pay when purchasing a new or used vehicle. That would raise an additional $50 million dollars for road repairs.  The group will vote on these proposals a second time later this month before releasing a full report in November.

I am skeptical that a Republican-controlled Iowa House and a Democratic-controlled or deadlocked Iowa Senate will agree to raise the gas tax during an election year, particularly since the new map of political boundaries will force many representatives to run for re-election on unfamiliar territory in 2012. Tea party activist Ryan Rhodes is urging legislators to leave this issue “off the table while we’re in very tough economic times.” I suspect many lawmakers from both parties will be tempted to do so.

On a related note, Democratic U.S. Representative Leonard Boswell may make infrastructure spending a campaign issue in his 2012 race against Republican Tom Latham in the redrawn third Congressional district. Boswell and U.S. Secretary of Agriculture Tom Vilsack held an event on October 10 to promote the infrastructure spending in President Barack Obama’s jobs plan. Excerpt from an e-mail blast Boswell sent to constituents on October 13:

Earlier this week, I joined U.S. Secretary of Agriculture Tom Vilsack here in Des Moines to promote the President’s plan for creating jobs and moving our economy in a positive direction.

We were on site at the Northwest Morningstar Drive bridge at the connection of I-35/80 North to highlight the need for support of the President’s American Jobs Act. This bridge – which was labeled “structurally deficient” during a recent inspection – is a prime example of why we must be repairing this critical infrastructure. Nearly 20 percent of our state’s bridges are structurally deficient and we cannot afford to neglect them any longer.

As a senior member of the House Transportation and Infrastructure Committee, I am determined to work towards a solution to fix our roads and bridges. The President’s plan would be a great boost, providing $386 million to help repair Iowa’s roads and bridges. In addition, the projects would employ thousands of workers and give tax breaks to over 60,000 businesses in our state. A typical Iowa household will also receive a $1,500 tax cut.

Obama’s jobs bill has been filibustered in the Senate and couldn’t pass the Republican-controlled House of Representatives in any event, but I am encouraged to hear Boswell talk about the need to prioritize road repairs. A few years ago he supported federal funding for a huge and unnecessary new road project in northeast Polk County. Spending more on infrastructure is good economic and transportation policy, but it would be foolish to drop hundreds of millions of dollars on building new roads when Iowa can’t afford to maintain the road miles we already have. Anyway, repair projects create more jobs than new road construction (see also here).

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  • Not necessary....

    This additional tax is a non-starter this year.  

    Too many 4 lane roads to nowhere…and maybe too many roads period.  While it is nice we lead the nation in paved roads, we really have too much infrastructure to maintain.

    Maybe less is more.