Iowa Nears Gas Tax Increase

State Senate passed legislation that would increase Iowa’s gas and diesel tax by 10 cents per gallon.

February 25, 2015

DES MOINES – Consumers could be paying higher state taxes at the pump for the first time in 26 years, reports the Des Moines Register. This week the state Senate passed a bill that would raise the state’s gasoline and diesel fuel tax by 10 cents per gallon. Next, the bill heads to the state House, where “supporters were optimistic it will pass and be signed by Gov. Terry Branstad.”

The revenue generated by the fuel tax increase would be used to “plug a  $215 million funding gap to meet the most critical needs on Iowa's 114,000-mile road system, where many aging roads and bridges need repairs,” writes the news source.

State Sen. Tod Bowman, chairman of the Iowa Senate Transportation Committee, said business leaders are warning that bad roads are one of Iowa's most serious economic development weaknesses. "We can't continue to kick this can down the road," he said.

State Sen. Amy Sinclair, who opposed the bill, said residents of her rural district can't afford higher gasoline taxes. She said many drive long distances to work and child care and carefully plan trips to the grocery store. “Passage of this bill will do more to harm my district than a minimum wage increase would do to help it," she said.

According to a Des Moines Register's Iowa Poll, residents are nearly evenly divided on the issue: Earlier this month 50% said they opposed raising the gas tax by about 10 cents, while 48% were in favor of the tax increase.

The news source adds that for someone who drives 15,000 miles a year in a vehicle that gets 25 mpg, the higher fuel tax would cost an additional $60 annually, or an average of $5 a month. On the high end, someone driving 30,000 miles in a “gas-guzzler” averaging 10 mpg would spend an additional $300 a year.

If Branstad were to sign the bill into law by the end of the week, the gas and diesel tax increase could take effect as early as March 1, notes the news source.

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