Iowa’s gas tax would be eight cents per gallon higher by April, 2014 under a proposal that has cleared a five-member House panel.
The bill also calls for new yearly fees for hybrid vehicles and for vehicles that run on alternative fuels, like propane or natural gas. Another provision in the bill would raise the tax paid on new vehicle purchases from five percent to six percent of the purchase price.
“We’re concerned that would provide a disincentive to purchase new vehicles in the state,” says Scott Sundstrom, a lobbyist for the Iowa Automobile Dealers Association. “…The auto industry has had a pretty difficult past few years and is just emerging from a very difficult time and we think increasing the cost of motor vehicles at this time is not a good idea.”
Lobbyist Tom Fey says those new fees on hybrids and electric cars are “problematic” for his client, General Motors.
“We see it as a very difficult situation when you’re trying to encourage the development of fuel-efficient vehicles and then you discourage the purchase of them by increasing the registration fees,” Fey says.
Under the proposal that cleared a five-member House subcommittee today, a new $100 fee would be established for electric cars and other vehicles, like some trucks and buses, which run entirely on alternative fuels like natural gas or propane and use no gas or diesel fuel whatsoever. A new $50 fee would be tacked onto the yearly registration for “multiple-fuel” vehicles that run on a combination of electricity and gas or diesel. Lindsey McQuarry, a lobbyist for Iowans for Tax Relief, says her group is opposed to the entire bill, both the fee and the tax increases.
“We are very concerned about the impact this gas tax increase will have on all Iowans at a time when it’s already difficult to make ends meet,” McQuarry says.
But the bill has the support of other groups, like the Iowa Bankers Association and the Iowa Motor Truck Association. Lyle Brehm of the Iowa County Engineers Association says his group backs the tax hike, too.
“Looking down the road, we’re going to need new revenues if we’re going to keep things moving in Iowa,” Brehm says.
Matt Steinfeldt of the Iowa Farm Bureau says the state needs the extra tax money to fix the state’s aging transportation infrastructure.
“Our members feel increasing the state’s motor fuel tax is the most equitable way to fund the state’s roads and bridges,” Steinfeldt says.
A bill pending in the Iowa Senate would hike the state gas tax by 10 cents per gallon by January 1, 2014. That bill does not propose any increases in vehicle fees.
A poll conducted last week for a Republican-leaning group called the Legacy Foundation found only a third of Iowans support a gas tax hike, while over 60 percent of those surveyed opposed an increase in the gas tax as well as increases in vehicle registration fees.