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Culver veto threat kills gas-tax increase
Gov. Chet Culver’s promise to veto any bill that increases the state’s fuel tax has likely killed the proposal for this session.
Culver, who has been an outspoken critic of the idea, previously stopped short of saying he would veto it. That changed today.
“I have been clear and consistent in my opposition to an increase in the gas tax, but let me leave no doubt: I will veto any increase in the gas tax,” Culver said. “We have many important issues to address this year, including creating new jobs, but raising taxes on hard-working Iowans is not one of them.”
The governor said he wanted to make his position clear so lawmakers would not spend any more time this session with the issue. Both the House and Senate Transportation committees were set to discuss an increase next week.
Senate Transportation Committee Chairman Tom Rielly, D-Oskaloosa, sponsored the bill to increase the gas tax. He told The Des Moines Register that without the governor’s support, the bill is dead.
A broad coalition of supporters had lined up behind the gas tax, including Democratic leaders in the Legislature, Republican state Agriculture Secretary Bill Northey, the Iowa Farm Bureau and local chambers of commerce. Culver, along with Republican leadership in the state Senate, stood opposed to the measure, saying raising any tax during an economic recession is poor public policy.
Supporters of the fuel-tax increase contend that Iowa needs more money to maintain the road system and make improvements to support economic development. A 10-cent increase in fuel taxes would raise an additional $210 million annually for city, county and state road projects. Iowa’s fuel tax currently ranks 32nd nationally and hasn’t been raised since 1989.
Culver has insisted that the recently passed federal stimulus package, in conjunction with his plan to borrow nearly $750 million, is a better way to pay for road and bridge repair than raising the fuel tax.
“President Obama’s federal recovery plan provides Iowa with over $350 million for transportation,” Culver said. “And my own jobs and infrastructure proposal will include another $250 million for transportation, especially for road safety and deficient bridges. These two better options mean more than $600 million to create jobs and improve our infrastructure, without raising taxes on Iowans.”
However, some economists fear that combination of funds is a short-term fix and will leave the state looking for infrastructure funding again when it runs out.
“If you want to fix the roads, the most efficient way to fix the roads is charge a user fee and in the current environment, the most efficient user fee is some type of fuel tax,” Arne Hallam, an economist at Iowa State University, recently told a joint session of House and Senate Transportation committees.
Rielly implied to The Register that while a gas-tax increase is dead this session there is little doubt it will need to be raised in the years to come, an idea Culver said he is open to.