Iowa lawmaker adds fuel tax boost to ethanol bill

Iowa House lawmaker adds proposal to raise state fuel tax by 10 cents to ethanol bill

Associated Press

DES MOINES, Iowa (AP) -- A proposal to increase the state fuel tax by 10 cents has resurfaced in the Iowa House.

Chair of the House Transportation Committee, Rep. Josh Byrnes, R-Osage, filed an amendment to a bill Thursday that would gradually increase the state fuel tax by 10 cents, though the measure awaits floor debate in the Iowa House.

"I've been an advocate of this all along. ... Iowans really do care about their roads," Byrnes said.

Money from the state fuel tax goes toward a fund used to maintain Iowa's roads and bridges, many of which are considered deteriorating or deficient. A 10-cent increase would yield $215 million annually for roads and bridges. But Iowa's fuel tax hasn't been raised since 1989.

Under the proposal, the current fuel tax of 22 cents per gallon by 3 cents July 1 and another 6 cents beginning July 1 2014.

Byrnes expects the House to debate the bill and his amendment Friday but said he wasn't sure how much support it has.

"This is a bipartisan issue. ... If we don't do it now, we won't see anything on it next year because it's an election year," Byrnes said.

Tod Bowman, D-Maquoketa and chair of the Senate Transportation Committee, said Thursday he thinks there would be enough bipartisan votes in the Senate to pass it.

"It's toxic, because everybody hates the word 'tax increase,'" Bowman said.

But Sen. Joni Ernst, R-Oak, said Thursday she wouldn't support a fuel tax increase, though she previously supported one two years ago.

"We have a great ending fund balance in the state right now, yet we're asking people to increase the tax on what they pay on fuel?" she said. "I know that our roads need help, we just need to figure out a different way to do it."

Republican Gov. Terry Branstad has said he will consider a fuel tax increase if state lawmakers approve property tax reductions and the overall tax burden for residents drops.

Tim Albrecht, a spokesman for Branstad, said Thursday the governor would need to see the proposal in its final form before supporting it.

Other proposals to raise the tax have come up repeatedly, and an effort to increase it by 10 cents failed in the Legislature last year.

The fuel tax proposal is attached to a bill that would extend tax breaks for ethanol blended fuels. That bill won approval in the Senate Thursday and now heads to the House.

Currently, ethanol blends are taxed at 20 cents a gallon and pure petroleum is taxed at 22 cents a gallon. Those numbers include a 1 cent environmental fee.

Without this bill, both types of fuel would soon be taxed at 21 cents total.

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