Gas tax might be hiked to fund road projects

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By Whitney Woodward | Thursday, April 10, 2008 |

DES MOINES — A package of fee increases to fund road construction will fall short of raising the cash that Iowa officials say is needed, prompting lawmakers to reconsider a boost in the state’s fuel tax.

For months, Republicans and Democrats have collaborated on a bill that would address, in whole or part, a Department of Transportation, or DOT, request for

$200 million in road funding. Officials say that amount is needed to pay for maintenance and construction projects.

But the plan — which would increase Iowans’ annual vehicle registration fees and eliminate a longstanding break for most pickup truck owners — would not meet the DOT’s funding target.

Failing to address infrastructure needs has thrust a fuel tax increase back in the limelight.

Under the bill now before lawmakers, vehicle owners would begin paying the increased fees after they purchase a different vehicle, ensuring that Iowans will not be required to pay more than they do for their current vehicles. Grandfathering the fee increases is designed to protect drivers’ checkbooks while quelling legislators’ election-year fears that voters will punish them for backing the fee increases.

But delaying the fees means the bill would generate

$11.6 million in the first year, far short of the road work needs.

House Minority Leader Christopher Rants, R-Sioux City, said the phase-in aspect is shrewd but problematic. Although he thinks Iowans should be protected from immediate hits to the checkbook, the phase-in means it will take years to generate significant construction money.

“You’re not going to build any bridges or build a lot of four-lane highways doing it in that manner,” he said.

Five years after being implemented, the package would generate an estimated

$151.8 million annually, about three-quarters of the DOT’s request.

With less than two weeks left in the legislative session, Democrats have not shored up sufficient bipartisan support in the form of Republican votes to get the bill passed, said House Majority Leader Kevin McCarthy, D-Des Moines. Rants said Thursday that his caucus remains divided on the issue.

“House Democrats have our ducks in order; House Republicans do not at this point,” McCarthy said. “We’ve said from day one that (on) every road bill, we need 50-50.”

A harsh winter that left Iowa roads riddled with potholes and a looming legislative adjournment date could pressure fence-sitters to back the bill. Lawmakers also are considering a fuel tax increase for next year.

Both Democrats and Republicans have harbored desires to hike the state tax on gasoline and diesel fuel because the increase would be shouldered by both in-state and out-of-state drivers.

Each one-cent increase in the current 20.7 cents-per-gallon tax would raise about $22 million per year.

Discussion about the tax was all but extinguished this spring after Gov. Chet Culver took the hike off the negotiating table last year, citing the already-high price of gasoline and diesel. But during a meeting with the Iowa Department of Transportation Commission this week, he said the issue should be discussed during the campaign season and could be revived in 2009.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said the package of registration fees could be coupled with the gasoline tax to create a sizeable pot of road construction funds.

“We don’t necessarily think you have to take the $200 million bite all (at once),” he said.

Whitney Woodward can be contacted at (515) 243-0138 or whitney.woodward@lee.net. Comment on this story at qctimes.com.