Updated 5:17 p.m.: Raising the state gas tax should be part of broader tax reform that actually could decrease what Iowans pay in taxes and fees, Gov. Terry Branstad said Friday.

“I think next year’s the year to do it,” Branstad said on Iowa Public Television’s Iowa Press.

Branstad has recognized the need for more revenue to meet state transportation needs, but he told lawmakers and local government leaders 2012 was not the year because of high gas prices. In recent weeks, however, gas prices have fallen, he said.

Taxes are likely to be a legislative priority next year. Republicans already are proposing returning about $390 million to taxpayers. Democrats and the GOP say they will continue to pursue property tax reform.

There was some support among Democrats and Republicans for phasing in a gas tax increase to help cover a projected $215 million yearly shortage in money needed to address Iowa’s critical transportation needs. A Senate subcommittee approved a

5-cent per gallon increase Jan. 1, 2013, and another nickel boost on Jan. 1, 2014.

Despite bipartisan efforts in both the House and Senate, supporters could not pull together the necessary votes to raise the tax for the first time since 1989.

Currently, Iowa charges

21 cents per gallon on sales of unleaded gasoline,

19 cents per gallon for ethanol-blended fuels and 22.5 cents a gallon for diesel.

A task force appointed by Branstad found $50 million in savings that have been redirected to road work. Much of it was one-time savings and will not provide an ongoing revenue stream. That panel also recommended a gas tax increase.

One source of opposition was auto dealers who objected to raising the registration fees for hybrid vehicles, electric cars and vehicles that run on natural gas. Branstad suggested a fee based on the mileage might be the answer.

“If we do that in conjunction with comprehensive tax reform, you can actually show that people will pay less taxes,” Branstad told reporters later, “and the people that will pay more in user fees are the ones that are going to get the benefit of better roads and bridges.”

Iowa Press can be seen at 8:30 a.m. today on IPTV World, at noon Sunday on IPTV and online at www.iptv.org.


Originally posted 3:15 p.m.: Raising the state gas tax should be part of broader tax reform that actually could decrease what Iowans pay in taxes and fees, Gov. Terry Branstad said Friday.

“I think next year’s the year to do it,” Branstad said on Iowa Public Television’s Iowa Press.

Branstad has recognized the need for more revenue to meet state transportation needs, but he told lawmakers and local government leaders 2012 was not the year because of high gas prices. In recent weeks, however, gas prices have fallen, he said.

Taxes are likely to be a legislative priority next year. Republicans already are proposing returning approximately $390 million to taxpayers. Democrats and the GOP say they will continue to pursue property tax reform.

There was some support among Democrats and Republicans for phasing in a gas tax increase to help cover a projected $215 million yearly shortage in money needed to address Iowa’s critical transportation needs. A Senate subcommittee approved a 5-cent per gallon increase Jan. 1, 2013, and another nickel boost on Jan. 1, 2014.

Despite bipartisan efforts in both the House and Senate, supporters could not pull together the necessary votes to raise the tax for the first time since 1989.

Currently, Iowa charges 21 cents per gallon on sales of unleaded gasoline, 19 cents per gallon for ethanol-blended fuels and 22.5 cents a gallon for diesel.

A task force appointed by Branstad found $50 million in savings that have been redirected to road work. Much of it was one-time savings and will not provide an ongoing revenue stream. That panel also recommended a gas tax increase.

One source of opposition was auto dealers who objected to raising the registration fees for hybrid vehicles, electric cars and vehicles that run on natural gas. Branstad suggested a fee based on the mileage might be the answer.

“If we do that in conjunction with comprehensive tax reform, you can actually show that people will pay less taxes,” Branstad told reporters later, “and the people that will pay more in user fees are the ones that are going to get the benefit of better roads and bridges.”

Iowa Press can be seen at 7:30 tonight and noon Sunday on IPTV, at 8:30 a.m. Saturday on IPTV World and online at www.iptv.org.

(7) comments

Mark Riley 4 State Senate
Mark Riley 4 State Senate

Our State and National road infrastructure plans need to include some major changes.

First we need to reduce and eliminate the number of 4 lane highways and paved roads that serve rural areas and low population densities. In short City folks need to stop subsidising wealthy farmers with an ethanol food tax and paying for too much infrastructure for a few. We cant find money for a major artery like I74 while we pave every gravel road and run 4 lanes to nowhere for farmers.

Secondly- While reducing highway construction we need to increase rail infrastructure and look to federalize the rail infrastructure of our rail industry. Currently a handful of railroads own all rail in America and they do not build rail to another railroads customers and they refuse to engage in passenger service because the cost of rail and traffic crossings is to prohibitive for 100mph track. American Rail is the only privately funded transportation system in the world (think about that). Barges, planes and trucks run on federal or state infrastructure and pay user fees. This also moves transportation fuel from oil based sources to coal, gas or nuclear and reduces diesel cost and consumption. (trains use traction motors that run on electricity with can be produced by other means than its diesel engine)
This has the added benefit of reducing transportation cost because companies like FEDEX or UPS would be able to start their own railroads and bring the demanding customer service environment of trucking to the largely monopolistic and inefficient and slow rail industry. You don't have to hurry if you are the only option.

Thirdly we need to change how we tax for transportation and move it more towards industry and less to the individual. For example.. the fines and fees need to be reduced on the working poor who are forced to drive with out license's to jobs they need in cars that we tax to oblivion in registration fees. We put up taxing cameras and speed traps and take their licenses when they cannot pay the outrageous fines for simple misdemeanors and we do that because we are always looking to fund something. Cops are mandated for quotas of revenue gathering or they face discipline. Obama' solicitor general in arguing before the Supreme Court for the right to plant tracking devices on cars with out warrants quoted "no one can drive with out violating some aspect of law that would allow an officer to stop that motorist". Driving should be a right in this age of technology and spread out communities. Our founding fathers never envisioned the state being able to restrict its citizens ability to move freely about the country.

Mark Riley 4 State Senate
Mark Riley 4 State Senate

The idea of a user tax is good but....We in Iowa currently recieve more money with the current system than we would get with a user fee. As all of us Iowans know while we wait in line for Illinois drivers to fill-up at our gas stations, that revenue will be lost to us and it is unmeasured and I bet very large. Currently we sell gas to out of state drivers who only travel a mile or so in our state and pay all their gas tax to Iowa. A user tax if it were possible to to enforce on Illinois drivers would result in very little revenue for the state. A user tax is also the only way I can see that we address the coming technology of "home gas stations" for natural gas cars already being implemented in California. It would seem to be impossible to road tax Natural gas.

WesB

Branstad actually has a good point about waiting till the price of fuel drops to institute the tax. As for the price of fuel - I take it all those complaining like large national deficits. The main problem is the usage rate in the US -and - there are numerous ways to reduce usage. And reduced usage means reduced cost to you, right? There is a limited supply of crude for sale in the world. And China and India (among others) are picking up their usage rate. Better start figuring on using less as time marches forward. I don't see a drop in prices in the long term - and much more likely - an increase in cost per barrel.

Sandi55
Sandi55

when are they going to stop taxing federal retirees annuities in the state of iowa? by they, i mean the state of iowa. i think all of the political people get paid too dam much anyway. where is OUR break??? (citizens, that is)

Gaius Baltar

So IA wants to confiscate an additional 10 cents/gal of gas (total then 30 cents), on top of the Feds 18.4 cents? And people want to demonize "Big Oil" for finding, drilling, refining and distributing the product? What entitles the gov't to their "windfall"?

QCA

I can barely afford to drive to work as it is. Something has to give here. There are only so many price increase/taxes that can be absorbed.

longjohn412

Republican Tax Relief/Reform = Cutting business Taxes and then raising the taxes of everyone else to make up for it

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