One of the most significant issues facing the Iowa General Assembly began to move with the introduction of companion bills in the House and Senate to increase the state’s gas tax by 10 cents per gallon.
House Study Bill 129: assigned to House Transportation Committee (subcommittee consists of Rep. Byrnes, Rep. Cohoon, Rep. Lykam, Rep. Moore, and Rep. Worthan)
Senate Study Bill 1168: assigned to Senate Transportation Committee (subcommittee consists of Sen. Bowman, Sen. Dvorsky, and Sen. Kapucian)
The Senate began the process of moving the bill forward with an extremely well attended subcommittee on Wednesday. After more than an hour of testimony (most of it expressing support for the measure), all three members of the subcommittee approved the measure and moved it to the full Senate Transportation Committee.
This was following by action on Thursday in a House subcommittee when (after a repeat of the previous day’s testimony) all five members of the subcommittee approved the measure and move it to the full House Transportation Committee.
Expect full committee work to begin on these bills in their respective committees next week. Once approved at that level, both will need to clear their chamber’s Ways and Means Committee before debate by the full House and Senate.
- Legislative intent: 100% of the additional revenue generated by the bill shall be used for critical road and bridge construction projects.
- Prohibits the use of these additional funds to pay for debt service—interest on bonds, loans, or other indebtedness incurred on or after the effective date.
- Raises permit fees for heavy haul loads.
- Increases by 10 cents the rate of the excise tax on motor fuel.
- Provides an incentive for the use of biodiesel blended as B-11 or higher.
- Will raise more than $200 million annually in new road revenue.
Major Divide on School Funding: House and Senate differ by over $100 million
This week the Iowa Senate approved legislation that sets the increase in supplemental state aid to schools at 4% for the fiscal year beginning July 1, 2015. This amounts to an annual spending increase of $212 million.
The Iowa House, however, adopted a more modest increase by setting the increase in supplemental state aid at 1.25% for FY16—which amounts to an annual spending increase of about $100 million. This was the same amount proposed by Governor Branstad in his budget recommendation for FY16.
Given the size of the proposed increases and the impact each has on the amount of new money available for spending in FY16, it will be a challenge to resolve many other state budget conflicts between the House and Senate until this matter is first resolved.
Here is a history of supplemental state aid increases over the four fiscal years:
- FY12 0% $178 million new spending (increase reflects state picking up the full cost of its share of school spending – the FY11 budget offloaded this portion of the cost to local taxpayers)
- FY13 2% $30 million new spending
- FY14 4% $122 million new spending
- FY15 4% $148 million new spending
- FY16 1.25% House proposal -- $100 million new spending
- FY16 4% Senate proposal -- $212 million new spending
Efforts on Behalf of Community Bankers of Iowa
- Provided testimony in favor of SSB 1168 (gas tax increase) to the Senate Transportation subcommittee on behalf of the Community Bankers of Iowa.
- Provided testimony in favor of HSB 129 (gas tax increase) to the House Transportation subcommittee on behalf of the Community Bankers of Iowa.