Branstad: Alternatives Needed To Gas Tax Increase

By Rod Boshart, Reporter

Casey's General Store and Kum & Go both operate gas stations on Penn Street in North Liberty. (Liz Martin/KCRG-TV9)

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By Richard Pratt

JOHNSTON, Iowa — Gov. Terry Branstad says public support for a gas tax increase has evaporated and he favors looking at state gambling profits or a dedicated share of the state sales tax as alternative sources to fund critical road and bridge upgrades in the future.

With gasoline and diesel fuels diminishing as reliable funding sources and more emphasis being placed on fuel-efficient vehicles, Branstad said Friday it is time to explore other transportation funding options, such as allocating money from the state’s infrastructure account that is fed by gaming proceeds or “possibly” using some sales tax revenue.

"The public doesn't want to see the cost of gasoline go up any more. They've seen these dramatic spikes and there's not public support for that, so we need to look at other alternatives,” Branstad said in talking to reporters during and after Friday’s taping of Iowa Public Television’s “Iowa Press” show.

The five-term Republican said Midwest states are “getting clobbered” by price spikes from oil companies and refineries that have approached or topped $4 a gallon recently, upsetting consumers and eroding support for raising Iowa’s gas tax for the first time since 1989.

“I think the idea of year after year coming back and saying we’ve got to raise the gas tax when the public is strongly opposed to it doesn’t make a lot of sense,” added Branstad. He said he is not looking to increase any tax or fee, but he ruled out collecting tolls on roadways as an option. He also noted the state formerly earmarked 10 percent of two cents of the sales tax to the road use tax fund up until about 1975.

The governor said he has asked state Department of Transportation Director Paul Trombino III and other interested groups to “think outside the box” and come up with new ideas for financing the construction and maintenance of Iowa’s road system.

“I think (road-construction interests) have to come to the realization that they don’t have public support to raise the gas tax and it’s probably not going to happen in an election year,” he said. “So, if they want to get additional money, they’re going to have to be willing to look at different ways to do it.”

The governor also said he hoped to build on a tax-policy compromise he will sign into law next week that provides the largest tax cut in state history, saying more property and income tax relief is needed but Senate File 295 represented the “art of what was possible to get accomplished” in the split-control Legislature.

“This is a very significant step forward,” Branstad said, but added “I think it’s very likely we’ll be looking at reducing the income tax further” in the 2014 legislative session.

Speaking of 2014, Branstad said he won’t make a decision whether to seek re-election to an unprecedented sixth term until early next year but sounded very much like a candidate during Friday’s interview.
“We’re laying the groundwork for a campaign,” Branstad said of himself and Lt. Gov. Kim Reynolds. “If I don’t run, I’m confident the lieutenant governor will.

“I think it’s very likely we’re going to keep this team together,” he added. “I think we’ve made great progress and we think there’s still a lot more to do.”

Branstad, 66, said his health is good and he has focused on better nutrition and exercise as he maintains a busy schedule. He ruled out a suggestion that he make his private medical records public, saying “I’m probably as open as anybody is and I will certainly report to people, but I am not going to just turn over all my doctor’s records. No, I don’t know of anybody that’s done that. I don’t think that’s appropriate.”

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