Ruan Transportation Management Systems Inc. CEO Steve Chapman says he would favor a gas tax increase if the money raised was guaranteed to be used for road and bridge funding.
Ruan Transportation Management Systems Inc. CEO Steve Chapman says he would favor a gas tax increase if the money raised was guaranteed to be used for road and bridge funding.

Raising the state’s gasoline tax rate would add operating costs for Ruan Transportation Management Systems Inc.

However, that’s a sacrifice Ruan President and CEO Steve Chapman is willing to make if the result is more funding to help the state keep up with road and bridge repairs.

Fuel is “a tremendous expense to this company, so obviously we look at that very closely,” Chapman said. “But I can tell you, we are equally concerned about the quality of the highway system in this country. ... So if I knew the funds were going to be used to fund infrastructure projects, I would be supportive.”

He is not alone. A number of business and industry groups have expressed support for raising the gas tax, including the Greater Des Moines Partnership and the Iowa Farm Bureau Federation.

Here’s why: For every cent per gallon added to the gas tax, the state will gain $23 million in revenue per year. The Iowa Department of Transportation (DOT) last year identified a critical funding shortfall of $215 million per year over the next 20 years. A report released in 2011 by a citizen advisory council put together by Gov. Terry Branstad recommended an 8- to 10-cent increase in the gas tax, which would bring in $184 million to $230 million a year in extra revenue. That would either narrow or close the DOT’s shortfall, assuming all funds raised go to infrastructure.

Gas tax advocates point out that the state hasn’t raised the gas tax since 1989, and say the longer Iowa goes without finding extra revenue, the worse things will get in the future.

But the politics get tricky.

A spokesperson for Branstad said the governor would “only look at increased revenue for our roads and bridges if it is contained within a broad, overall tax reform package that reduces taxes on all Iowans.” Branstad told the Iowa Taxpayers Association in December that he wouldn’t push for a gas tax increase, but that he wouldn’t necessarily veto such legislation.

Not good enough, says state Sen. Matt McCoy, a Des Moines Democrat who serves as the co-chair of the Legislature’s joint Transportation, Infrastructure and Capitals Appropriations Subcommittee. McCoy is a believer that the issue should stand on its own, and that Branstad needs to be a leader in educating the public on the benefits of raising the tax.

But politicians on both sides of the aisle acknowledge that pushing for a gas tax increase is dangerous politically, which is part of the reason a bill to raise the levy didn’t get brought up last year even though it was a bipartisan proposal.

Without Branstad’s advocacy and widespread bipartisan support, the issue will likely have a tough time getting off the ground on its own due to public sentiment against raising taxes. If the matter does come up as part of a comprehensive tax reform, though, it could stand more of a chance.

“I think that there’s general support for an increase in funding for horizontal infrastructure. I think the Legislature believes there needs to be a greater investment. The question is, how?” said Kraig Paulsen, speaker of the Iowa House of Representatives.

“I know this: It’s very important to House Republicans that when we are done at the end of session, that we are collecting less money from Iowans than when we showed up,” he added.

Whether or not boosting the gas tax is a stand-alone issue, the Greater Des Moines Partnership’s position is that this is the year for the Legislature to take up the issue.

“We’re not so much concerned with the process,” said Matt Hinch, senior vice president of government relations at the Partnership. “We just are supportive of increasing funding for our roads and bridges in Central Iowa.”?