Gas tax hike takes effect Sunday
It's official: Iowa's gas tax is going up.
Gov. Terry Branstad signed a bill on Wednesday raising the state's gasoline and diesel fuel taxes by 10 cents a gallon.
The bill passed the Iowa House and Senate on Tuesday after legislative leaders from both parties worked with the Republican governor to reach a consensus on a funding package to provide an additional $215 million annually for city, county and state roads.
Branstad received Senate File 257 in his Iowa Capitol office on Wednesday morning and immediately signed it.
"This is a great example, on a difficult and controversial issue, of the kind of bipartisan cooperation that really makes Iowa stand out as a state where we work together and we get things done on behalf of the citizens of our state," Branstad said. "This is important for economic development. This is important for our farmers to be able to get their crops to market. I know that many people have been waiting a long time for this."
The last gas tax increase was in 1989.
Branstad pointed out the fuel tax increase has had broad support from groups like the Iowa Farm Bureau, Chambers of Commerce and other business groups, and Iowa's trucking industry. He noted the bill also imposes restrictions on future debt and bonding for local government road projects. That's important, he said, explaining that he believes in a "pay-as-you-go" method of financing road construction with user fees that benefit people who pay the extra fuel tax.
The tax increase will go into effect at the pump on Sunday, March 1. Branstad said he wants to begin collecting the additional tax now to permit cities, counties and the state to advance their schedules for badly needed work on roads and bridges.
One road project that could be accelerated because of the additional gas tax revenue is the expansion of U.S. Highway 20 in northwest Iowa from two lanes to four lanes, the governor said. The Iowa Department of Transportation is currently working on a section of U.S. 20 between Moville and Correctionville, leaving a 37-mile stretch between Correctionville and Early. Once the final piece is completed, U.S. Highway 20 will be a four-lane expressway from Sioux City to Dubuque.
Rep. Greg Heartsill, R-Columbia, who opposed the gas tax increase in a House floor speech on Tuesday, said Wednesday that he will move forward in the wake of Branstad signing the bill. However, he said he remains concerned the process which led to the bill's passage only permitted the involvement of a handful of powerful legislators, along with several influential special interest groups.
"They said, 'This the only option,' " Heartsill said. He noted that amendments were rejected in both the House and Senate for alternatives to raising fuel taxes, such as diverting money from the state's general fund into the road use tax fund. The general fund pays for most state programs, such as education and public safety, and receives money from income taxes, sales taxes, and other sources.
"An issue this big deserves more input from legislators on both sides of the aisle and in both chambers," Heartsill said. "My biggest concern is that those voices were shut out."
David Scott, executive director of the Iowa Good Roads Association, a highway lobby group, said Wednesday that someone told him they couldn't believe the House and Senate passed the gas tax bill in a mere span of three hours on Tuesday.
"I said, 'It actually took 10 years and three hours because we have been working on this for 10 years,' " Scott said. He added that numerous studies have been conducted of Iowa's road funding issues over the past decade, and all had pointed to a need for additional revenue.
Although several rural lawmakers have complained the 10-cent gas tax increase won't solve all the problems on Iowa's aging network of county roads and bridges, the additional revenue will clearly provide some help, Scott said. He noted that both the Iowa County Engineers Association and the Iowa State Association of Counties had officially declared their support for the gas tax bill.
Drew Klein, state director of Americans for Prosperity, a conservative advocacy group, issued a statement accusing Branstad and legislative leaders of shifting the burden for road funding to Iowa's poor and working-class families.
"Gov. Branstad's signature on the gas tax hike adds to the disappointment of Iowans who seek real leadership as the state wrestles with how to address long-term infrastructure needs," Klein said. "The short-sightedness of raising the gas tax 45 percent will cause the legislature to search for additional dollars by 2020, and the refusal to consider amendments about the allocation of funds means that transportation problems in rural Iowa will continue to grow."