DES MOINES — Gov. Terry Branstad plans to hold talks with top legislative leaders yet this month aimed at forging bipartisan agreement on a plan to generate more revenue to address critical state infrastructure needs.
If the effort produces a consensus that can garner support in the split-control Legislature, the governor said he would include the proposal in the 2015 program and budget package that he spells out to a joint session of the newly seated 86th Iowa General Assembly next month.
“My goal is to see if we can get both caucuses in both parties, a majority of House and Senate Democrats and Republicans, to agree with me on a plan. That’s what we did in 1988 and that’s what I’d like to see us do again,” Branstad said in an interview last week.
“I’d like to solve the problem,” he said.
The governor said he hopes to schedule a December meeting with representatives of the four political caucuses of the Legislature where Republicans hold a majority in the Iowa House and Democrats control the Iowa Senate to discuss the prospects for finding a permanent solution to address a yearly $215 million shortfall in meeting critical transportation needs — especially upgrading roads and bridges.
“I do intend to call in the leadership and share with them the different options and ask them what they like and what they don’t like and see if we can fit these pieces together and reach an agreement,” he said. “I think the timing is right and I think we should move on it early and get it done in 2015.”
If an agreement is reached early that can garner bipartisan support, Branstad said he will recommend it as part of his legislative package when he delivers his Condition of the State address on Jan. 13, but he added “the likelihood of that maybe is not very good. I think it’s probably more likely that we’ll have several discussions.”
Branstad said he already has had initial talks with House Speaker Kraig Paulsen, R-Hiawatha, and Senate Majority Leader Mike Gronstal, D-Council Bluffs.
During recent legislative forums, Paulsen has said he doesn’t believe there is a consensus on how to address the road funding issue, but he believes the discussion is as “robust” as any time he’s been in the Legislature.
“What the outcome will be, that remains to be seen,” Paulsen told members of the Iowa Taxpayers Association.
Gronstal said Iowans already are financing local road improvements as more counties bond for infrastructure repairs, but those costs are borne by property taxpayers when most people believe a user fee is a better approach because it captures money from out-of-state travelers who contribute to the wear on Iowa highways.
“For me, it is on the table very much,” Gronstal said. “I think it’s overdue in this state. I believe we’re paying huge costs by not investing in our transportation infrastructure.”
If a consensus can be reached that garners broad bipartisan support, which would mean 14 Democrats and 12 Republicans in the Senate, “I believe it can be done this year,” Gronstal said. “The governor has clearly left that door open.”
Senate Republican Leader Bill Dix of Shell Rock said he expects the infrastructure funding issue to be front and center in the upcoming session.
“What I’m hearing from Iowans more and more is they’re beginning to recognize that there are some consequences to not finding a way to get more resources into the road fund sooner rather than later, and I believe that’s beginning to resonate to the Legislature,” Dix said. “At the moment, I think it’s too early to tell, but I know there is definitely interest in taking a look at how consensus could be built and finding a way to get that done.”
Branstad said state Department of Transportation researchers have developed a number of options for bolstering the road use tax fund and he believes the solution going forward should not rely solely upon raising the per-gallon gas tax. He said any plan should include multiple measures to offset revenue losses because of more fuel-efficient vehicles.
“If we come up with a series of user fees to do that, then it’s really a matter of what is the fairest and most-equitable way of doing that,” the governor said.
A recent analysis by the state’s nonpartisan Legislative Services Agency tested five possible methods for increasing fuel tax revenue, and only two generated sufficient funds to cover the state’s shortfall. One was a 10-cent increase followed by tying the tax to inflation; the other was a “combination” tax that lowered the per-gallon tax to 16 cents and added a 5 percent sales tax on the retail price of fuel.
The state has not increased its fuel tax since 1989.
Motorists now pay a state fuel tax of 21 cents a gallon for regular gasoline, 19 cents on each gallon of ethanol-blended gasoline and 22.5 cents per gallon for diesel fuel. Each penny increase in the state gas tax would raise $23 million in revenue.