Raising the Gas Tax is Wrong for Iowa

Last Thursday, a Iowa House subcommittee voted 5-0 in favor of House Study Bill 514 which if passed would raise the state excise tax on gasoline by 10 cents over the next three years.  The tax would be raised by 3 cents per gallon next July 1, another three cents by July 1, 2015, and four cents by July 1, 2016.

This charge is being led by State Representative Josh Byrnes (R-Osage) who is the chairman of the House Transportation Committee.

Any revenue that is collected from the gas excise tax is allocated to Iowa’s Road Use Tax Fund which is constitutional protected an only supposed to be used to maintain Iowa’s roadways.  Currently,  regular unleaded gas has a 21 cents per gallon state excise tax.  Ethanol has a 19 tax and diesel fuel is taxed 22.5 cents a gallon.

The Cedar Rapids Gazette reported that Byrnes “said he suspected if the split-control Legislature could get a gas tax bill to Gov. Terry Branstad’s desk, that he will support it like he did the last gas tax increase in Iowa in 1989.  So far Branstad has not endorsed any plan.

Byrnes, was joined by State Representatives Dennis Cohoon (D-Burlington), Jim Lykam (D-Davenport), Brian Moore (R-Bellevue) and Gary Worthan (R-Storm Lake) in support of the tax increase.

All of the recent polling that I have seen on the issue a clear majority of Iowans are against such a tax increase.

And Byrnes wants to do this in an election year?  Politically speaking that is a fool’s errand, and legislators would  follow his lead at their electoral peril.  Politics aside a tax increase will be hard on Iowa families during a time where many families budgets are stretched by existing high gas prices.

The Sioux City Journal reports that studies suggest the tax increase would cost Iowa motorists between $50-60 per year.  I believe that is a conservative figure.  Certainly families who don’t drive much and have cars with excellent fuel economy will be impacted the least by this change.  Not everyone is in that boat.  Just a personal example my car averages around 20 miles per gallon (Yeah I know, I’d love to have a car with better fuel economy, but just can’t do it right now).  I average around 19,000 miles per year.  In 2016 I will be paying $95 more, and that is just for my car.  What about the transportation industry who is already being impacted by ungodly high gas prices?

Do they think this won’t impact jobs?  What kind of impact will this make on our agricultural economy?

I understand we need to keep our transportation infrastructure maintained and I agree that it is an essential function of state government.  There are other options.

For instance State Senator Amy Sinclair (R-Allerton) is the lead sponsor for SF 2042 which would make an annual transfer of 2% of the general fund receipts to the road use fund.  She told Caffeinated Thoughts, “It would be a standing appropriation so would be a stable and consistent source of funding without increasing taxes.”

State Representative Jake Highfill (R-Johnston) plans to file a bill that would send 1/2 of a percent of existing revenue to the road use fund.  He told Caffeinated Thoughts that it would provide approximately $270 million annually.  “It constitutionally protects existing revenue without raising taxes.  It sets our priorities straight,” Highfill said.

State Representative Jason Schultz (R-Schleswig) also supports a similar approach that he outlined during a Americans for Prosperity event in Logan, IA.  He suggested diverting 1 to 2 cents of our current sales tax to the road fund.

The Iowa Legislature, especially Republicans, need to strongly consider alternative means of funding roads.  It does not make sense when the state has been producing a surplus.  Also when Iowans see a growing state budget every year under Governor Branstad it’s hard to fathom that the only solution to this problem is to raise taxes.

Reader Poll: Should Iowa raise the gas tax?