Branstad endorses gas tax hike, but not this year

A day before delivering a budget message that he said will be “austere and somewhat painful,” Gov. Terry Branstad encouraged transportation stakeholders to build support for a gas tax increase next year.

“Frankly, this year, our first priority is to get the state's financial house in order,” said Branstad who will present his budget to the Legislature Jan. 27. “We have a big budget mess to straighten out.”

However, Wednesday he told representatives of highway associations and coalitions, local elected officials, engineers, economic developers and other stakeholders who were in Des Moines for Transportation Day at the Capitol, transportation is critically important to economic development in the state.

Having the resources to maintain and improve the transportation system is “absolutely critical to our goal of creating 200,000 jobs and raising incomes by 25 percent and making Iowa a growing and competitive state,” Branstad said.

That was welcome news to the transportation stakeholders who have lobbied in recent years for a gas tax increase to provide those resources.

“Words matter,” Ken Anderson of the Marshalltown Chamber of Commerce said. “In the past we have been cut off at the pass by words from the governor.”

He was referring to then-Gov. Chet Culver's promise last year to veto a gas tax increase just as support for it was building in the Legislature.

That was counter-productive, Branstad said.

“I want to team with you and help in this effort because I see it as part of what is critically important to our economic development success and achieving our ambitious job creation goals and income growth goals,” Branstad said.

“Your encouragement is helpful and I hope you will continue to beat that drum,” Anderson said.

“I will,” Branstad said.

He's talked to Department of Transportation Director Nancy Richardson about involving business and community leaders in educating lawmakers and the public about the state's transportation needs. Specifically, he mentioned the need to complete a four-lane Highway 20 to Sioux City.

The motor fuel tax has remained virtually unchanged since 1989 while increases in the cost of construction and maintenance – asphalt, concrete, fuel, steel, insurance and wages - has eroded its buying power by as much as 70 percent, according to lawmakers.

Meanwhile, the statewide need for all jurisdictions is $3.483 billion annually, according to the DOT. Of that, $2.256 billion annually is identified as critical needs. The average annual revenue available to all jurisdictions is approximately $1.989 billion creating an annual shortfall of $1.494 billion. The critical funding shortfall is $267 million annually.

Branstad repeatedly referred to motor fuel taxes as user fees that benefit motorists who pay it.

“It's not like a general tax that is imposed on people who might not get a benefit,” he said, adding that non-Iowans traveling through the state pay it too when they buy fuel.