Branstad Makes Gas Tax Change Contingent on Other Tax Relief
By Rod Boshart, Reporter
DES MOINES, Iowa – Gov. Terry Branstad said Monday that any legislative effort to raise the state’s gas tax would be contingent on Iowa lawmakers approving tax relief for property owners and income earners.
Branstad told reporters he intends to advocate for a reduction in the commercial/industrial property tax rate, a limitation on increases to residential and agriculture property tax rates, and a reduction in Iowa’s individual and corporate income tax rates once the newly elected members of the 85th Iowa General Assembly convene their 2013 session next January.
“I would say those are going to be my priorities. Those are things I want to see approved,” the governor said. “I’ve said I’m willing to consider changes in the road user fee, which is paid for by the people who use the roads. First of all, I think that it would have to be modest and over a period of time but only in conjunction with reducing those taxes. I want to see a tax reduction, not a tax increase for Iowans.”
Republicans who control the Iowa House and Democrats who guide the Iowa Senate adjourned last May without passing a comprehensive property tax relief package and did not take up a proposed gas-tax increase. Branstad and legislative Republicans announced a united “Iowa Strong” effort last week heading into the fall campaign that pledged to “promote job creation through tax relief and reform” but provided no specifics, saying more details would be forthcoming as the Nov. 6 election gets closer. When the 2012 session ended, House GOP leaders indicated they would be back next year with a proposal to cut Iowans’ taxes by $390 million – using the $90 million in a new taxpayer trust account and the state’s projected $300 million ending balance.
During his weekly call-in show and again on Monday, Branstad said he is not advocating a gas tax increase, but was “open to considering” some adjustment in the per-gallon fee paid by all users of Iowa roads and bridges as part of a comprehensive effort to reduce property and income tax burdens.
Iowa's gas tax – which has not changed since 1989 – now ranges from 19 cents to 22.5 cents per gallon, depending on the type of fuel.
A citizens’ panel appointed by Branstad recommended a number of steps to increase money to address the state’s critical infrastructure needs, including raising the state gas tax by 8 cents to 10 cents a gallon. The governor did not endorse the recommendations, but called upon state Department of Transportation officials to find at least $50 million in savings and efficiencies and to move forward $127 million in federal reimbursements linked to Missouri River flood upgrades to help cover critical construction needs this year.
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