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Gas tax hike sputters forward in Legislature

Rod Boshart, CR Gazette –

DES MOINES – Legislative efforts to jump start a sputtering state gas tax proposal got moving Wednesday when a Senate Ways and Means subcommittee pumped in its support.

The 2-1 vote came after lobbyists on both sides of the issue debated the pros and cons of the Senate plan to boost Iowa’s gas tax for the first time since 1989 with a 5-cent per gallon increase next Jan. 1 and another nickel boost on Jan. 1, 2014, as a way to help cover a projected $215 million yearly shortage in money needed to address Iowa’s critical transportation needs.

“There is critical mass this year with agricultural groups, business and industry groups coming together in agreement that we need to address this critical problem,” said James Piazza of the Heavy Highway Contractors Association,” it’s time for public safety and for economic development and to put folks in the construction industry back to work and we’re asking for that leadership now.”

Other supporters said the increase in constitutionally protected gas tax revenue would spur construction-related economic activity, create thousands of jobs, and make roads and bridges safer for commerce and travel.

However, opponents said adding costs to already spiking gas prices would hit consumers hard in the pocketbook and put service stations in Iowa’s border communities at a competitive disadvantage.

“This is absolutely the wrong time to be raising taxes on Iowans,” said Lindsey McQuarry, a lobbyist for Iowans for Tax Relief. “This is a tax that will affect almost every Iowan.”

Sen. Randy Feenstra, R-Hull, who cast the lone no vote, said he was “adamantly opposed” to increasing the current state gas tax by roughly 50 percent and doing it just a few years after vehicle license and registration fees were increased over several years to generate an extra $160 million for transportation needs. He said the state Department of Transportation should reapportion the available funds to bridge and road repairs and upgrades rather than building new bypasses and highways.

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.

Sen. Matt McCoy, D-Des Moines, agreed with a number of speakers that there’s no good time to raise taxes and conceded a favorable vote in an election year could carry some political liability, but he said a decision has been put off for too long and now policy-makers are having to “play catch up” in addressing issues that have gone neglected.

“To be frank, we’re not helped by the price spike that’s occurred in gas, but at the same time I think that it is not an insurmountable challenge to us,” said McCoy, who indicated there were more than 26 senators from both political parties who would vote for a gas tax increase if the issue is debated.

Sen. Joe Bolkcom, D-Iowa City, chairman of the Senate Ways and Means Committee, said he was not certain that would happen this session.

“I don’t have any plans immediately to do anything with that bill. I don’t think it’s clear whether there’s consensus forming to actually move it forward,” he said. “I think the House has to get a bill moving. We’ll have to see if there’s an appetite to move ahead and so far I really don’t see that.”

Rep. David Tjepkes, R-Gowrie, chairman of the House Transportation Committee, said he believed there was “considerable support” for raising the gas tax, but he noted the proposal and phase-in period could be modified to increase the state gas tax by three cents a gallon annually for three years through Jan. 1, 2015. Another option being discussed would be to adopt a policy that other states have to delegate authority to the Iowa DOT Commission to raise the gas tax under specific limitations as the need arises.

“Everyone is keeping a very open mind as to any possibilities,” he said, “being very mindful we’re in March and we’re getting towards the end.”

However, House Speaker Kraig Paulsen, R-Hiawatha, said he did not sense a groundswell of public support to raise the state tax on a gallon of gasoline and he was willing to allow DOT officials to implement savings and efficiencies they have identified under Gov. Terry Branstad’s directive.

“I haven’t seen anything that’s changed my mind,” he said. “I don’t think it has the requisite support among legislators.”

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