The chairman of a key committee in the legislature says raising the state gas tax should boost the economy.
A commission appointed by Republican Governor Terry Branstad has recommended raising Iowa’s gas tax by up to 10 cents per gallon. Senator Tom Rielly, a Democrat, is chairman of the Senate Transportation Committee.
“When you have good, safe roads, it increases jobs,” Rielly says. “It increases economic development.”
Iowa’s gas tax hasn’t been raised since 1989 and Rielly, the former mayor of Oskaloosa, argues the 22-cent-per-gallon tax is no longer raising enough money to cover the maintenance and construction of the state’s roads and bridges.
“The average, everyday Joe, they don’t like pot holes. I mean, back in my days as mayor, I had average, every day Joe call me and say, ‘Fix my potholes,'” Rielly says. “That’s what we’re really talking about doing here.”
A 10-cent hike in the state gas tax would raise an estimated $230 million in additional revenue for Iowa road projects. The commission also voted to raise the state sales tax on the purchase of new or used vehicles from five to six percent, which officials project will raise state tax collections by $50 million. The group rejected other ideas, like ending the significantly lower registration fee for pick-ups or requiring a registration feefor farm equipment. The commission recommended further study on what sort of fees or taxes the state should assess on hybrid or electric vehicles which avoid paying state taxes at the gas pump at the same rate as the gas-powered vehicles on Iowa’s roads.
The founder of the Iowa Tea Party has established a Facebook page which calls for tabling the idea of raising the gas tax in 2012.