August 28, 2014

Lawmaker proposes linking gas tax hike to vehicle fee reduction

One legislative leader says if lawmakers move to raise the state’s gas tax, they need to reduce vehicle fees for Iowans at the same time. House Democratic Leader Kevin McCarthy of Des Moines says four years ago legislators boosted the state’s road and bridge construction budget by about $11 million – by raising a range of vehicle license fees.

“And because the gas tax was not a part of the equation at that time, we have shifted the burden, as a percentage, to the Iowa driver,” McCarthy says.

Advocates of increasing the gas tax say it ensures drivers who come into the state to travel on Iowa highways help pay for road maintainance when they buy gas and pay the state fuel tax. In 2008, legislators voted to dramatically raise license fees for cars made after the 2010 model year. Many pick-up owners are paying significantly higher fees, too.

State transportation officials say the need for road and bridge construction in Iowa is about $215 million above what’s being collected in gas taxes this year.

“We have a short fall and that short fall is real,” McCarthy says.

McCarthy says he and other Democrats are ready to work with Republicans to come up with a plan that would resolve the road funding dilemma by raising the gas tax and lowering some vehicle fees.