Branstad: Gas tax hike needed, but unlikely this session

Despite $700 million transportation budget, governor says it has to be done

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DES MOINES — Although lawmakers are keeping hopes of a motor fuel tax increase alive, Gov. Terry Branstad doubts a majority of them are willing to touch that political hot potato in the waning days of the 2014 legislative session.

“Getting it done in this session is probably pretty difficult,” he told members of the Iowa Partnership on Economic Progress Tuesday. “The only way I think you get it done in an election year is to get a majority of Democrats and Republicans in both chambers so they can’t use it as a partisan issue against the other.”

That requires “a very delicate balance,” the fifth-term Republican said, “I know there are people who have been working on it all session, but I think it’s more likely it’s not going to get done this year. It’s probably something that needs to be done next year.”

But it needs to be done, Branstad said, despite the state’s $700 million transportation construction budget this year — “The biggest ever.”

“The problem is after that, there are questions about the federal program,” which provides about half of the state’s construction funds, Branstad said, “plus we haven’t seen an increase in motor fuel user fees since 1989.”

Iowans pay 21 cents in state tax on a gallon of regular gasoline and 19 cents for ethanol-blended fuel.

An increase would help address what the Department of Transportation calls a $215 million annual backlog in “critical” repairs.

House Transportation Committee Chairman Josh Byrnes, R-Osage, is proposing to cut the state’s per-gallon fuel tax but add a 5 percent excise tax on the wholesale of gasoline. That would likely cost consumers $40 to $60 a year, he said.

Branstad likes that approach. A flat gas tax increase remains unpopular, he said, but he thinks the “hybrid” approach — used in a dozen states — would be more likely to be adopted by lawmakers.

Byrnes was encouraged by Branstad’s remarks.

“That’s more than we’ve heard from the governor before,” he said.

He also was encouraged by support from Rep. Roger Thomas, D-Elkader, who told Byrnes he would do what he could to get the tax approved this year.

“It’s not a legacy thing,” said Thomas, who is not seeking re-election, “but it would make some city and county folks happy.” In his northeast Iowa district, he said, county engineers have closed bridges because they don’t have funds to maintain them.

Also, over the weekend, a Guthrie County farmer received non-life threatening injuries when a bridge collapsed under the farm tractor he was driving.

Byrnes’ proposal wouldn’t fix every problem, Thomas said, “but it would move things in the right direction.”

However, Branstad doesn’t see it happening this year.

“We need to be realistic,” he said noting that legislators predicted in January the session would be over by now. However, they have several parts of the state budget to approve and have yet to approve his Home Base Veterans program, broadband connectivity plan and anti-bullying legislation. “Just to get all of that done, they’ll be lucky to get out of here in April.”

Thomas isn’t willing to write off a gas tax hike this year. He said most of the legislators he talks to understand something needs to be done.

“If they roll out something and the Senate Republicans can come up with a few more votes, well, you never know what’s going to happen,” he said.

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