DES MOINES — Draft legislation calling for a 10-cent fuel tax increase is expected to be introduced in the Iowa Legislature this week or early next week at the latest.
It’s a three-year roll-up to get to the dime: 3 cents the first year, 3 cents the second and 4 cents the third and final year.
“Those numbers are sort of placeholders for right now because we wanted to get it drafted,” said House Transportation Committee Chairman Josh Byrnes, R-Osage.
Still, the figures put it in the range of last year’s recommendation from Gov. Terry Branstad’s Transportation 2020 Citizen Advisory Commission, which recommended an increase of 8 to 10 cents, plus boosts in certain fees to pay for a backlog of road repairs.
Byrnes said phasing the tax in could help make it more palatable taxpayers and it could make a difference in border states where future fuel tax increases could come into play.
“We all know that Illinois has some financial issues, and I’m guessing they might look at a gas tax to raise revenue,” he said.
Illinois charges 19 cents per gallon on gasoline and 21.5 cents per gallon on diesel. Illinois service stations also charge local sales taxes on the base price of fuel sales. Iowa charges 21 cents per gallon on gasoline and 22.5 cents on diesel, but local sales tax is not charged on fuel purchases.
Each cent increase is expected to bring in an extra $22 million a year for the state’s road fund.
Wednesday, the transportation committee hosted a pair of county officials from Humboldt County who gave a presentation on the condition of the county’s roads and bridges.
“If we increase the gas tax, that’s still a diminishing return, because cars are getting more fuel efficient and whatnot,” County Supervisor Harlan Hansen said. “But we need to do something.”
Although the legislation has not been filed, taxpayer groups already have come out in opposition. The Muscatine-based Iowans for Tax Relief has gone on record against it, and Wednesday, the Americans for Prosperity Iowa branch announced it would start a “No Gas Tax Iowa” campaign.
“It is ironic that many lawmakers who campaigned on not raising taxes on the poor and middle class are now trying to increase the gas tax,” Mark Lucas, state director for the group said in a news release announcing the campaign. “Less than three months later after their election, these same politicians are thinking about raising a tax that will fall particularly hard on poor and middle class Iowans.”
Byrnes said he expected some pushback.
“If you have a better solution, tell me about it,” he said.