Gronstal: Gas-tax increase has 50-50 chance of passage

Senate panel approved one version; House panel to take up this week

Iowa Senate Majority Leader Mike Gronstal, D-Council Bluffs. (AP)
Iowa Senate Majority Leader Mike Gronstal, D-Council Bluffs. (AP)

JOHNSTON – The leader of the Iowa Senate gives a proposed gas-tax increase a 50-50 chance in the Legislature this session.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said the only way an increase in the state’s user fee on motor fuel will make it to Gov. Terry Branstad’s desk is if it has broad bipartisan support. He also said the bill will not reach fruition in the House and Senate unless they receive assurances from the governor that he will sign it.

Earlier this week, a Senate Transportation subcommittee approved a measure that would raise the gas tax by 5 cents a gallon on Jan. 1, 2013, and another 5 cents a gallon on Jan. 1, 2014. Proceeds would go to the TIME-21 fund, distributed as 60 percent for state transportation needs and 20 percent each to cities and counties for bridge, highway and other transportation repairs or upgrades.

The Senate bill  also would extend tax breaks for biodiesel and ethanol and study transportation trends to equitably pay future highway costs.

Gronstal said a House subcommittee is slated to consider a separate gas-tax measure Monday.

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.

In the fall, members of the Governor’s Transportation 2020 Citizen Advisory Commission recommended new funding mechanisms for high-efficiency and hybrid vehicles and to study whether all vehicles using public roadways pay their fair share. The panel also recommended an increase between 8 and 10 cents per gallon to the state’s motor fuel tax.

Branstad, who signed the last gas-tax increase into law in 1989, instructed DOT director Paul Trombino to eliminate duplications, find efficiencies and identify administrative savings that would be the equivalent of 2 cents of fuel tax, or about $50 million. Trombino recently issued a report that identified $33 million in ongoing yearly savings and $17 million in one-time savings that could be phased in over several years.

The governor has said he expects Iowa will have enough transportation money to meet critical needs in the coming construction season, but he conceded that he expects a phased increase in the highway user fee likely will have to be considered to address the state’s projected $220 million yearly shortfall.

Opponents say this is a bad time economically to raise the gas tax with Iowans still trying to recover from the recession.

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