T4America Blog

Iowa was the first to successfully raise new state transportation funding in 2015 – and they did it with bipartisan support

Iowa in February became the first state in 2015 to pass a transportation-funding bill when legislators moved to raise the state’s gasoline and diesel taxes by 10 cents per gallon.  

Though seven states have now successfully moved to raise new transportation funding in 2015, Iowa made it to the finish line first. On February 25^th, Republican Iowa Governor Terry Branstad signed a bill into law that increased the state’s gasoline and diesel fuel taxes by 10 cents per gallon, raising new funding to help maintain the roads and bridges crisscrossing one of the most important states for freight and agriculture in the U.S.

Iowa governor Terry Branstad.

In signing the bill, Branstad said: “This is a great example — on a difficult and controversial issue — of the kind of bipartisan cooperation that really makes Iowa stand out as a state, where we work together and we get things done on behalf of the citizens of our state. This is important for economic development. This is important for our farmers to be able to get their crops to market. I know that many people have been waiting a long time for the legislature to act.”

The increased gas tax — the rate on regular gas rose from 21 to 31 cents per gallon, and the rate for diesel rose from 22.5 to 32.5 cents per gallon — and other associated fees took effect on March 1^st. Last week, Iowa’s Department of Transportation stated their plans to use the new funds toward $700 million in road maintenance and construction projects.

“I feel Iowa took a huge step forward by addressing our aging infrastructure,” State Rep. Josh Byrnes (R-Osage), chairman of the House Transportation Committee, told AgriNews. “It shows that Iowa is truly open for business and we have the leadership to make difficult decisions. Iowa is a net exporter of goods and these funds will help ensure that Iowa continues to have the needed infrastructure to transport people and products.”

HISTORY LESSON

At the start of the legislative session, Iowa was facing an estimated $215 million annual gap between revenues and needs, according to the state Department of Transportation. The state’s gas tax was last raised in 1989 to 19 cents per gallon, during current governor Terry Branstad’s first foray as governor of the Hawkeye State.

For years, key legislators and business leaders pushed for meaningful legislation to bolster transportation funding, but they never gained enough momentum to pass it, said Senator Tod Bowman (D-Clinton), chair of the Senate Transportation Committee. “We couldn’t drum up enough support. We didn’t really have the leadership from the Governor,” he said.

This year would prove to be different, however.

Iowa state representative Jim Lykam.

Gov. Branstad’s vocal support was critical in convincing Republican lawmakers that this was a must-pass piece of legislation for the state, said State Rep. Jim Lykam (D-Davenport), the ranking member of the House Transportation Committee. “We were in constant communication with the governor’s office,” he said. “You always run the risk of sending the bill down and having the governor veto it, and we needed to make sure this wouldn’t happen.”

The bill had to jump an atypical hurdle before it passed. The Senate minority leader and the House speaker required that the bill garner “yes” votes from the majority of each minority party in each chamber. This unusual requirement meant that the bill would not move without widespread consensus.

“This consumed me for the first six weeks of the session,” said State Rep. Lykam. “It was just back and forth negotiations. You try and do something — you pick up votes, but then you lose votes over here — so it was a give and take.”

IOWANS GETTING INSPIRED IN DENVER

Just before their work began in the new legislative session in January, Rep. Lykam and Senator Bowman attended Transportation for America’s Capital Ideas Conference in Denver in November 2014, which helped them find focus and fresh ideas that they brought back to Iowa. Senator Bowman learned from a group of attendees from Massachusetts about the pros and cons of tying any future gas tax increases to inflation.

Scott VanDeWoestyne, the government affairs director for the Quad Cities Chamber of Commerce — another Capital Ideas attendee — said the conference helped light a fire under him and the two legislators.

“They were able to come back from Denver, and come here to the Quad Cities region and engage in good conversation,” VanDeWoestyne said. “Good comprehensive discussions with their colleagues about, ‘Hey, these are some of the other things states are doing, and we need to be focused on this.’”

VanDeWoestyne also stressed the importance of Iowa’s transportation funding bill to the Quad Cities metro area.

“Our economy in the Quad Cities region is growing fast,” he added, “and the state’s transportation investments have had a tough time keeping pace. This is one of the reasons we have championed greater federal and state transportation investments in Iowa. So, it was very heartening to see this year that Iowa moved towards a solution, and we’re happy to be a part of the compromise.”

EDUCATING THE MASSES

As with any piece of legislation that involves new taxes, not all Iowans were on board. A coalition of stakeholders from across the state focused on educating legislators and the general public and establishing consensus that the transportation package was necessary to support economic development and provide better quality of life to the state’s residents.

Iowa state senator Todd Bowman.

“The more that people know about the issue, the easier it is to push a difficult thing like a tax increase,” said Senator Bowman. “Nobody wants to pay more taxes for their fuel. But nobody wants their roads and bridges to deteriorate, and so it becomes a point of education.”

THE GOVERNOR’S SUPPORT

Rep. Lykam cites the governor’s continuous support as one of the critical reasons why this bill gained the broad agreement needed to pass the legislature. “When the Governor grabs the microphone, you know he’s got the bullhorn for the full state,” said Lykam. “It was very, very important that we had his support.”

It took a few years, a broad coalition of stakeholders and bipartisan consensus, but Iowans have shown what can be accomplished when partisan politics are set aside to raise the necessary revenue to maintain and enhance their transportation system to support the state’s economy.

As we note here often, the Iowa legislature acted to expand their capacity to match and stretch the dollars they expect from the federal program. Congress needs to act, in turn, to stabilize and increase that funding, to ensure that the bold moves in state houses this year are not undermined by a wobbly federal partner.