Iowa legislative state of play on raising the gas tax

Iowa House and Senate members have taken several steps toward raising the state gasoline tax for the first time since 1989. Follow me after the jump for details on where the legislation stands and the latest signals from the governor.

One big political question was answered today, as House Speaker Kraig Paulsen not only endorsed the gas tax bill but personally intervened to make sure it would clear the House Ways and Means Committee. His support may bring some reluctant House Republicans on board. Conservative advocacy groups such as Americans for Prosperity and Iowans for Tax Relief are pushing hard against any gas tax increase. Governor Terry Branstad or Iowa Senate Minority Leader Bill Dix appear ready to back this bill but may need to spend more political capital to get it passed.

Two important policy questions remain unanswered. First, what will be done to lessen the blow on low-income Iowans, who would be disproportionately affected by any increase in a regressive tax? Iowa’s tax system is already stacked against people with lower incomes.

Second, will the gas tax hike turn out to be a giant bait and switch? From business groups to road builders to heavyweights in the agricultural sector, advocates of a tax increase cite the poor condition of many Iowa roads and bridges. However, to my knowledge the pending legislation would not guarantee that any new Road Use Tax Fund revenues from gasoline taxes or vehicle fees be spent on repairing torn-up roads or structurally deficient bridges. Unless “fix it first” language or a change to the funding formula is added to the bill, the lion’s share of additional revenues from a gas tax hike could go toward building new roads or new lanes on existing roads, such as U.S. Highway 20 in northwest Iowa or any number of local “economic development” projects. If crumbling roads and bridges are used to justify a gas tax hike, lawmakers should stipulate that most of the new money raised would go toward existing infrastructure rather than new roads and lanes, which only increase future maintenance costs.  

Iowa House

The Iowa House Transportation Committee has long been led by advocates of raising the gas tax, so it was no surprise when the corresponding bill cleared that committee yesterday by sixteen votes to five. (Four of the five “no” votes came from Democrats.) Rather than phasing in an increase over several years, this bill would raise gas taxes by 10 cents a gallon on the first day of the month after it is signed into law. According to the Iowa legislature’s fiscal bureau, this bill would produce $205 million in additional Road Use Tax Fund revenues during fiscal year 2016, $202 million the following year, and $200 million the year after that. Current Road Use Tax Fund revenues fall an estimated $215 million short of what is needed annually to maintain existing infrastructure.

Originally known as House Study Bill 129, the bill was renamed House File 351. Speaking at yesterday’s committee hearing, House Transportation Committee Chair Josh Byrnes said,

“It’s never easy when we start talking about tax increases, but I do feel that at the end of the day this does seem to be the right mechanims for what we need to do,”  […]

Byrnes said he’s been presented with a number of “interesting…outside the box” alternatives, but raising the gas tax ensures those who use the roads – including out-of-staters who drive through Iowa – pay for the upkeep. “This is something that needs to be done for the state of Iowa,” Byrnes said.

House File 351 then moved to the House Ways and Means Committee, where votes to send it on to the full chamber appeared to be lacking. House Speaker Kraig Paulsen, not previously seen as a strong proponent of raising the gas tax, intervened decisively this morning. He yanked GOP State Representative Jake Highfill off Ways and Means and replaced him with Brian Moore, a longtime champion of raising the gas tax. In addition, Paulsen asked first-term State Representative Zach Nunn to sit out today’s hearing so that the speaker could vote in his place. I can’t remember a precedent for that particular power play in the Iowa legislature. O.Kay Henderson reported for Radio Iowa,

“I’m not going to ask somebody to go flip their vote,” Paulsen told reporters before the meeting. […]

“I’m not going to ask somebody to do something I’m not willing to do,” Paulsen said.

Paulsen said he made those extraordinary moves because it’s clear a bipartisan consensus has emerged among legislators and the bill can pass both the House and Senate with both Republican and Democratic votes.

Erin Murphy reported on the 13-12 Ways and Means Committee vote to send the bill to the House floor:

Party support in the House committee was mixed: Republicans cast eight votes for and six against, and Democrats cast five votes in favor and six against.

The House Journals don’t list roll calls for committee votes on bills, but I will update this post when I can name all the legislators who voted yes and no. UPDATE: On the House Transportation Committee, the following representatives voted yes: Committee Chair Josh Byrnes (R), Vice Chair Brian Best (R), Brian Moore (R), Gary Carlson (R), Mary Ann Hanusa (R), Dan Huseman (R), Lee Hein (R), Norlin Mommsen (R), Dawn Pettengill (R), Dave Maxwell (R), Gary Worthan (R), ranking member Jim Lykam (D), Dennis Cohoon (D), Rick Olson (D), Sally Stutsman (D), Mary Wolfe (D). The no votes came from John Landon (R), Dave Jacoby (D), David Dawson (D), Abby Finkenauer (D), and Jo Oldson (D).

On the House Ways and Means Committee, the thirteen yes votes came from Committee Vice Chair Dave Maxwell (R), Josh Byrnes (R), Lee Hein (R), Linda Miller (R), Brian Moore (R), Kraig Paulsen (R), Matt Windschitl (R), Greg Forristall (R), Chuck Isenhart (D), Jerry Kearns (D), Dave Jacoby (D), Mary Gaskill (D), and Sharon Steckman (D). The twelve votes against raising the gas tax came from Committee Chair Tom Sands (R), Chip Baltimore (R), Peter Cownie (R), Pat Grassley (R), Chris Hagenow (R), Guy Vander Linden (R), Timi Brown-Powers (D), Abby Finkenauer (D), Charlie McConkey (D), Todd Prichard (D), Dan Kelley (D), and Patti Ruff (D).

Worth noting: Jacoby voted against the bill in the Transportation Committee but for it in Ways and Means the next day. I wonder why. Sometimes legislators lean one way but are willing to go the other way if their vote is really needed.

The biggest surprise for me is that Grassley voted against this bill, given the overwhelming support from Big Ag for raising the gas tax. Grassley is considered a likely candidate for Iowa secretary of agriculture in 2018, assuming that current Secretary of Agriculture Bill Northey runs for governor.

The full Iowa House could debate House File 351 as early as next week.

Reading the lobbyist declarations on House File 351 reveals how many powerful interest groups are behind a gas tax hike. As noted above, however, there is no guarantee that additional revenues from a gas tax increase would be spent on fixing those vital “farm to market” roads. The main opponents are Iowans for Tax Relief and lobbyists representing gas stations.

Americans for Prosperity has also been pushing an anti-gas tax message and blasted today’s vote. I laugh every time I see these anti-tax zealots claim to be concerned about regressive taxes or policies that will “hit low and middle income families the hardest.” Most of the policies advocated by Iowans for Tax Relief and Americans for Prosperity are skewed toward the top income brackets and would cause service cuts and other hardship for those on the lower end.

Iowa Senate

Senate Majority Leader Mike Gronstal has made clear in the past that he is open to raising the gas tax, but only if at least half the Republicans in the upper chamber go along. Democrats clinging to a 26 to 24 majority in the state Senate don’t want to hand Republicans ammunition for future campaign attacks.

Senate Minority Leader Bill Dix has been a protege of Iowans for Tax Relief for many years. Until recently, he hadn’t taken a clear position on raising the gas tax. However, he told constituents at a town-hall meeting this past weekend and reporters at the Capitol today that he can get behind the current bill.

“I’ve been supportive of the process, and I’ve been supportive of the fact that we need to find additional resources to get into the road funding to solve those long-term problems, and I’m prepared to cast a vote in favor of it,” Dix said.

Originally known as Senate Study Bill 1168, the renamed Senate File 257 includes the same provisions as House File 351. It passed the Senate Transportation Committee on February 17 and was referred to the Senate Ways and Means Committee, which passed it today.

Iowa Senate Journals include details on committee votes. On the Senate Transportation Committee, the following nine senators voted to approve the gas tax hike: Committee Chair Tod Bowman (D), Bob Dvorsky (D), Dick Dearden (D), Wally Horn (D), Matt McCoy (D), Herman Quirmbach (D), ranking member Tim Kapucian (R), Mike Breitbach (R), Tim Kraayenbrink (R). Three senators voted no: Chris Brase (D), Randy Feenstra (R), and Roby Smith (R). Democrat Jeff Danielson was absent. Brase is up for re-election in 2016, and both parties will likely target his race in Senate district 46.  

On Senate Ways and Means, the vote recommending passage of Senate File 257 went eight to six. Yes votes came from Committee Chair Joe Bolkcom (D), Rob Hogg (D), Bill Dotzler (D), Pam Jochum (D), Matt McCoy (D), Janet Petersen (D), Herman Quirmbach (D), and Mike Breitbach (R). The votes against raising the gas tax came from Joe Seng (D), Chaz Allen (D), Randy Feenstra (R), Jerry Behn (R), Jason Schultz (R), and Roby Smith (R). Republican Bill Anderson was absent.

I’m curious to see how many Republican votes Dix can deliver when this bill hits the Senate floor.

Governor Branstad

Since shortly after his re-election, Governor Terry Branstad has made supportive noises about raising the gas tax, but he’s far from a forceful advocate. Here’s the relevant part of the transcript from Branstad’s appearance on last weekend’s “Iowa Press” program on Iowa Public Television.

Henderson: Governor, this past week the state’s truck stops went to the Statehouse and said, the gas tax is a jobs issue for us and they pleaded with legislators that if they do raise the gas tax that it be phased in over two years. Do you think that’s a good option?

Branstad: Well, we have been working with the bipartisan leadership in both the House and the Senate since the beginning of the session on this. I think they now have bill drafts that are before both committees. And obviously our goal is to get bipartisan support in both houses to get this accomplished. It’s a compromise and it’s not what everybody would like and I’m sure that there are many groups would like to see it differently. But there is a clear need for additional money for infrastructure, for our roads and bridges, in the counties, cities, as well as the state. And I think the timing is right to get it done this year.

Henderson: What is your role going to be in getting votes in the House and Senate among your fellow republicans?

Branstad: I’ve had personal discussions with members of both houses on this and we have time set aside to visit with legislators. We have primarily been working with the leadership and the leadership has been working with the committee chairs. And the nice thing about it, it’s not a partisan issue and people have been going down this road together and I have said that I’m open to considering different options and we had the Department of Transportation put together a lot of different ideas. Some of those ideas are included in this bill. Some of them are not. But it is something, it’s a timely issue, it’s an important issue. Along with our broadband initiative, this is a session where I’m hopeful infrastructure will be addressed.

At a press conference on February 16, Branstad said he would sign a gas tax increase. Or did he?

When asked by a reporter, “If the house and senate both vote on the bills the way they are, would you sign it?” Branstad responded, “Yes.”

The house and senate are looking at identical bills that would raise the current fuel tax a dime per gallon.

But in a later reply in his weekly news conference, Branstad phrased his words differently. He said, “What I’m saying is what I do support is providing additional funding for the road use tax fund. And we’ve been working in conjunction with the house and senate to get it,” Branstad said.

He added, “I never make a final decision on bills until I receive them.”

Legislators from both parties have told Bleeding Heartland that the governor may need to push harder in order to secure votes in the House and Senate. The worst-case scenario for lawmakers would be voting for a gas tax hike that never becomes law because of a veto. Why should anyone stick their necks out if there is any chance the governor would reject a bipartisan bill?

Any relevant comments are welcome in this thread.

UPDATE: Corrected above to show that during the Iowa House Ways and Means Committee vote, Democrat Dan Kelley voted against the gas tax bill, while Republican Greg Forristall voted for it.

Former Iowa House Speaker Chris Rants confirmed to Bleeding Heartland that on several occasions he changed committee assignments to move bills. In one case, social conservative Republican lawmaker Danny Carroll was pulled off a committee so that a gaming bill could advance.

In the comments, Bleeding Heartland user x writes that Democratic Iowa House Speaker Don Avenson may have employed a similar maneuver to move a gas tax bill during the 1980s.

I have not heard of any similar precedent in the Iowa Senate during the last two decades.  

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  • It was before my time

    but I heard yesterday that Don Avenson did something similar to move the gas tax forward when he was Speaker. I don’t have direct knowledge of that, so perhaps someone else can confirm or deny.