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Iowa Fuel Tax Hike
Mon January 16, 2012
Lawmakers could increase Iowa’s fuel tax.
Two Southeast Iowa lawmakers believe the state’s fuel tax will eventually increase.
State Senator Gene Fraise (D-Lee County) and State Representative Jerry Kearns (D-Keokuk) do not foresee an increase during an election year.
The two recently spoke to members of the Keokuk Area Chamber of Commerce during a legislative luncheon.
Fraise says a proposal gaining support in Des Moines would increase the fuel tax by four cents/year for two years.
It would take effect next year.
“The Governor (Terry Branstad) originally said that was off the table and that he did not want to talk about it,” says Fraise, “but he did say if we brought him that type of package, he could accept it.”
Fraise says the one-year delay would allow the governor to explore further cuts and savings within the Iowa Department of Transportation.
Kearns says any proposal must look beyond gasoline.
“If we are going to end up with a lot of vehicles that use other fueling methods,” says Kearns, “we probably have to figure out a way to tax vehicles that use electricity or other means.”
It’s estimated that a one-cent increase would generate about $20-million/year.
Two economists say increasing Iowa’s fuel tax would help the state and be relatively painless to consumers.
Iowa State University economist David Swenson says a 10-cent/gallon increase would cost the average family about $32/year.
The tax increase would finance road improvements and local government programs.