Iowa on Verge of 10-Cent Hike in Gas Tax—An Increase of 44.44 Percent

If Republican Governor Terry Branstad signs the bi-partisan bill as signs indicate, the increase will be the most significant state transportation funding legislation since Republican Gov. Matt Mead of Wyoming signed a 10-cent increase two years ago.
February 25, 2015, 8am PST | Irvin Dawid
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Mark Tauscheck of KCCI Des Moines gives the vote count for each house of the state's General Assembly on Feb. 24: "The Senate voted 28-21 in favor of the bill on Tuesday about noon. The House passed SF 257 in a vote of 53-46 about 1:50 p.m."

The legislature now needs to 'finalize' the bill, after which it will be sent to the governor's office who has three days to act. While Branstad has only said that he "will carefully review the bill in its final form before announcing a final decision," Tauscheck writes that House Transportation Committee Chair Josh Byrnes told him that he "is expected to sign the measure."

If signed, the Hawkeye State's state 22.5-cents per gallon tax (19-cents per gallon for ethanol blended gas), last raised in 1989, will increase by a dime as early as March 1.

As of Jan. 1, the gas tax was the 36th highest in the nation according to the American Petroleum Institute [PDF]. The average gas tax in the United States on January 1 was 27.66 cents. The state would possibly have the 13th highest on March 1.

Recent History of the Bills, Including "Highly Unusual Move" in House.

The bills squeaked by two key committees in the split-control legislature with help from Republican House leadership in a most unusual move on Thursday, February 19. Democrats are the majority in the Senate—Republicans in the House.

In the Senate Ways and Means Committee, it was "approved on an 8-6 vote," wrote William Petroski and Brianne Pfannenstiel on February 20 in The Des Moines Register. In the House Ways and Means Committee it "advanced on a 13-12 vote." Two members who opposed the tax were replaced with supporters by Republican House Speaker Kraig Paulsen in advance of the vote in what the reporters call an "uncommon move to ensure the outcome."

After that vote, the editors of Bloomberg news opined, "A political development of actual importance is occurring in Iowa this month: Democrats and Republicans are proposing to increase the state’s gas tax."

Members of both parties have good reason to support it: More than 1 in 4 of the state’s major roads are in poor condition [PDF], and an equal proportion of its bridges is structurally deficient or functionally obsolete.

"Gov. Terry Branstad on Monday gave a strong signal that he would approve a 10-cent per-gallon increase in the state’s gas tax if the split-control Legislature can get a bipartisan agreement to his desk that would generate $215 million annually to address critical road and bridge improvements," wrote Rod Boshart for KCRG ABC News on February 16.

Advocating for the legislation is the Iowa Farm Bureau. Opposing it is the Iowa branch of Americans For Prosperity.

"For a person who drives 15,000 miles per year in a vehicle that gets 25 miles per gallon, the proposed tax increase would cost $60 annually," note the Register reporters, similar to the flat $50 registration fee proposed by Calif. Assembly Speaker Toni Atkins posted here Friday.

However, unlike Iowa, where tax increases need pass with only a majority vote ("26 votes in the Senate and 51 in the House," according to an email by William Petroski), California tax increase legislation requires passage by a supermajority of two-thirds.

Branstad has changed his attitude toward gas taxes since June 2013, when he indicated that "(t)ax cuts, not increases, are on his agenda". Low gas prices played a key role, as it did with other governors, as noted last month.

Hat tip to AASHTO Journal.

Correspondent's note: An excellent discussion on paying for transportation improvements as it relates to this legislation can be found on a Feb. 6 Iowa Press video, featuring the legislative advocates, the press asking questions, and a bill opponent.

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Published on Tuesday, February 24, 2015 in KCCI Des Moines
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