Fuel tax is still spinning, but not moving
It seems like the idea of raising Iowa’s fuel tax for the first time in nearly a quarter century has run out of gas.
The debate has gone quiet. Other issues are jamming the road to legislative adjournment. The fuel tax is just sitting there, unwanted, spinning in place like the last hot dog at the gas station.
But its backers insist that they’re not licked, yet.
“In my opinion, it is not dead. It is still a live round,” said Rep. Joshua Byrnes, R-Osage, chairman of the House Transportation Committee. “I would say those of us who support it have been good soldiers, stayed pretty quiet. We’ve been waiting our turn.”
“I think it’s in the same place it’s been,” said Sen. Tod Bowman, D-Maquoketa, chairman of the Senate Transportation Committee. “If this is going to happen, it’s going to happen with commercial property tax relief.”
So a phased-in, 10-cent fuel tax increase providing
$215 million annually for state, county and city road projects has been shackled to the glacial struggle to reach a deal on property tax reforms. Gov. Terry Branstad and others say they can’t accept any gas tax increase unless it’s offset with property tax relief. Some Democrats also want an increase in the Earned Income Tax Credit for low-income Iowans before they’ll accept other tax measures.
The dominoes watch doesn’t stop at the Statehouse steps. The word on the broken, potholed streets of Cedar Rapids is that if a fuel tax increase doesn’t happen, local leaders might seek a local-option sales tax extension for streets later this year. “That has been discussed, but not solid as an option,” said City Council member Don Karr in an email.
And really, who could blame city leaders stepping up to address a major local issue? If the state goes a 24th year without increasing the 22-cent per-gallon tax, the message to local governments on streets is, basically, you’re on your own. Davenport, Dubuque and Waterloo already use varying portions of their locally collected sales tax pennies to fix streets. It makes sense for Cedar Rapids to do the same. Presented with a good plan, I think voters here would agree.
I understand why the governor and lawmakers want property tax relief. So do I. But it’s worth noting that raising the gas tax is a form of local property tax relief in the 24 counties and many cities, including Cedar Rapids, that issue bonded debt to pay for street projects. Property taxes pay that debt, with interest.
The pressure on cities to hold the line on property taxes and also fix streets is immense. Something’s gotta give.
Outside of Des Moines, fixing roads and bridges makes sense to a lot of people, even if we don’t like to pay higher taxes. Byrnes says quite a few lawmakers who opposed the increase have changed their minds after going home to legislative forums and finding heavy support for an increase, even among staunch Republicans who abhor higher taxes. Bowman says his inbox is still filling with arguments of support, including messages from county engineers who are now putting embargoes on crumbling rural bridges.
As I’ve said previously, I’d like to see any gas tax increase coupled with low-income tax relief and a mechanism that would temporarily suspend the increase if fuel prices spike amid a crisis. I’d also like to see a revised fuel tax spending formula sending more money to urban roadways, though I concede that’s not going to happen.
But at this point, I’m with Byrnes. I’d just like to see this issue actually get debated and voted on.“I don’t think anything’s completely dead until the gavel slams down for the last time of the session,” Byrnes said.“I wish we could take the politics out of it and do what we need to do. It’s the right thing to do.”