Branstad: Alternatives to Motor Fuel Taxes Must Be Considered

By James Lynch, Reporter

VINTON, Iowa - Gov. Terry Branstad sent another signal Tuesday that he's willing to consider higher motor fuel taxes.

However, the governor also told a Vinton town hall audience that simply raising taxes on gasoline and diesel won't generate the revenue needed by all levels of government to maintain the Iowa's horizontal infrastructure.

"I want something to keep up with inflation and not be a declining source of revenue," the fifth-term Republican told about 40 people at the first of two Eastern Iowa town hall meetings. Later, Branstad visited with residents in the Tama.

In the 2013 session of the Iowa Legislature, lawmakers discussed increasing the motor fuel tax by 10 cents over three years. That proposal was shelved when gas prices jumped to nearly $4 a gallon.

"It's a problem that never goes away," Branstad said about funding road and bridge maintenance. "Hopefully we'll have something ready by next legislative session."

He's looking for a source – or sources – of revenue that will keep up with inflation. The state motor fuel tax hasn't been raise since 1989 even though costs of building and maintaining the state highway system has increased dramatically in that time.

Even if the gas tax is increased, Branstad said, revenue is likely to decline as fuel efficiency is improved and consumers choose electric and hybrid vehicles.

"So the state has to look at alternatives to the gas tax unless it wants to see revenues for transportation to fall," he said.

In the meantime, local governments are borrowing money to maintain their roads and streets. Vinton City Coordinator Andy Lint said the city had recently borrowed nearly $2 million for street maintenance.

Branstad cautioned against the trend among cities and several counties to borrow money for roads and street upkeep. The concern is that it the repairs won't last as long as it takes to repay the borrowed money.

"We prefer pay-as-you-go," Lint assured the governor, "but it's got to be paid for somehow."

Urbana resident Rich Zeis told Branstad that diesel fuel taxes should be increased because heavy trucks cause the most damage to roads. He suggested the difference between the gas tax and diesel tax should be more than the current two cents.

However, Branstad pointed out that truck registration fees, like the fee for carts, is based on weight and value.

"So the bigger they are, the heavier they are, the more expensive they are, the higher the annual registration fee they pay," he said. Also, trucks generate more revenue because they use about three to four times as much fuel as a car to cover the same distance.
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