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Hatch Proposes 10-cent Gas Tax Hike
By James Lynch, Reporter
DES MOINES, Iowa - Democratic gubernatorial hopeful Sen. Jack Hatch is proposing to phase in a 10-cent gas tax hike – less than $50 a year for most Iowans, he said – to pay for overdue road and bridge improvements, build passenger rail links, construct flood protection, reduce the backlog of school construction projects and expand broadband service in rural Iowa.
Infrastructure, in all of its forms, is one of the most basic parts of state and local government, Hatch said today in announcing his Building a Better Iowa infrastructure plan.
"The dirty secret that we have been doing and dodging for too long is that we are painfully behind," the Des Moines lawmaker said. State government hasn't been able to adequately provide the resources to maintain its current roads, streets and bridges "let alone building the roads, streets and bridges we will need to maintain a competitive edge in the future."
In addition to the gas tax increase, which Hatch said would generate $21 million per penny, he wants to tap one-fifth of the state's current and future surplus funds to accelerate infrastructure spending.
Although not proposed as an economic stimulus program, Hatch said his plan would create jobs and economic activity in Iowa.
"It's done to really affect the infrastructure needs in roads and bridges," he said. "We're catching up from years of neglect."
Specifically, Hatch said, Republican Gov. Terry Branstad "has been fairly benign" in supporting a gas tax increase even after it was recommended by his self-appointed advisory commission.
"This is a failure on Gov. Branstad's part and now he's trying to cobble together fees, taxes and revenue from other state budgets to come up with some plan to fund an alternative to a gas tax increase," he said. "That just gets us deeper in the hole."
There is a broad group of interests that already support a gas tax increase. Hatch believes he can explain to Iowans why a phased-in increase is good for the state and let them convince their elected officials to support his plan.
It might take longer to bring his fellow legislators along.
"I think part of the problem is that when we talk about any tax, you have politicians running for the closet," he said.
However, he's also proposing an income tax cut that would save middle income families up to $1,000 a year.
"Next to that, a $50 annual increase in gas taxes looks pretty minor and is very manageable," he said. "In that context, I will be able to explain to Iowans that their disposable income will be greater."
Here's a summary of Hatch's plan:
1. Road Use Tax Fund dollars will be directed to the IDOT 5-year plan on an accelerated basis, funding at 1.5 times the annual amount as long as funds are available.
2. Bridge repair and replacement will be increased with 2,500, or about half, of the structurally deficient bridges in the state coming up to acceptable standards within the first five fiscal years of the Rebuild Iowa Infrastructure Fund.
3. Revival of a federal partnership to build passenger rail from Des Moines to Chicago.
4. Upgrades to freight and passenger rail lines equaling ½ of the mileage that needs to be upgraded within the first five fiscal years of the Rebuild Iowa Infrastructure Fund.
5. Upgrade Iowa's portion of U.S. Highway 20 to four lanes to accelerate economic development in the northwest part of the state.
6. Partner with school districts through a new competitive revolving loan program to allow school districts in Iowa to meet at least one-fourth of the $4.7 billion backlog in school construction needs within the first five fiscal years of the Rebuild Iowa Infrastructure Fund.
7. Expand broadband internet service across the state, leaving no gaps in coverage. US Secretary of Agriculture Tom Vilsack says broadband is crucial to helping rural communities with health care, social services, education, and "gives small-town businesses a chance to compete globally."
8. Continue our investment in local flood protection projects to prevent further property losses.
9. Provide assistance to municipal water and waste management systems to ensure safe and reliable drinking water.
For more on his plan, visit www.jackhatch.com