Economists in favor of fuel tax increase

JOHNSTON - Two economists on Friday advocated hiking Iowa's fuel tax to pay for highway improvements, a change they say would hardly be noticed by most consumers.

Iowa State University economist David Swenson and Creighton University economist Ernie Goss made the comments during a taping of the “Iowa Press” program, set to air this weekend on public television.

Gov. Terry Branstad and the Legislature are engaged in a debate over highway funding. Key lawmakers of both parties are pushing state transportation officials to find up to $50 million in savings next year by finding new efficiencies in highway spending. They would follow that with a four-cent increase in the state's fuel tax in each of the next two years.

Swenson said if the gas tax is increased by 10 cents, a typical family would only pay about $32 more each year.

“We're not talking about a tax that's going to have a significant impact on your average household,” he said.

He said that cost is worth it because of the overall benefit from road improvements financed by the tax increase.

Goss agreed, saying a poor road system would hurt the ability for Iowa's economy to expand.

“Infrastructure is vital, and that would be highways and roads,” Goss said. “There are positives on the infrastructure side that outweigh that cost. Having poor roads is not what you want in Iowa.”

Swenson also noted that about half of the fuel tax goes to support local government programs.

Branstad has agreed only with finding the $50 million in administrative savings next year, but has said he will look at other options. Spokesman Tim Albrecht repeated that position on Friday.

“We must spend the tax dollars we receive more efficiently and streamline operations to maximize every dollar,” said Albrecht, in a statement.

State transportation officials have said they will offer detail of where they will find the efficiencies as early as next week.

Swenson said motorists would pay far more if the highway system deteriorates.

“Not having good roads and having roads that are in disrepair is hard on your car,” he said.