Branstad: Local gas sales tax option for funding county roads

DES MOINES — Gov. Terry Branstad stated his intention Wednesday at the annual Associated Press Legislative Seminary to present a two-year budget to the General Assembly in conjunction with next week’s Condition of the State Address. Branstad, a Republican, also indicated he would include a 5-year projection of the state’s finances.

Near the top of the governor’s list of priorities for the 2015 legislative session is Iowa road and infrastructure funding. Branstad said he intends to present a series of options to Republican and Democratic lawmakers aimed at increasing rural road funding, but the suggestion pushed most aggressively by the governor Wednesday was a 1 cent local option sales tax per every gallon of gas. The proposal would give Iowa counties the option of holding a referendum on the local 1 cent increase, allowing those funds to remain within county lines for local roadway projects. The governor said he hopes to see action on this early in the session.

“We have local option sales on everything else, but gasoline and diesel fuel does not. But if you had an excise tax on that, a county could submit it to the voters and that way it would all stay at the local level,” Branstad said.

The governor defended Iowa’s “pay-as-you-go” approach to infrastructure spending and stated bonding to supplement the lack of road use dollars at the county level is something he thinks should be avoided.

Legislative leaders gave an indication Tuesday that road repairs would be a priority as session begins. Leaders in both chambers of the General Assembly indicated they would look at the governor’s local option gas tax proposal, but stopped short Wednesday of voicing support. Senate Minority Leader Bill Dix (R-Shell Rock ) said his party will entertain increasing road use funding, but what form that takes is “still a bit of a mystery.”

Senate Majority Leader Mike Gronstal (D-Council Bluffs) echoed Dix’s hesitation to openly support the governor’s plan at this early stage.

“I don’t have a particularly deep thought on that,” Gronstal said. “I think that becomes a challenge because your farm to market roads go past county boundaries. I think there is some concern but I’m certainly open to looking at that.”

Lawmakers in Des Moines and the governor have been under increased pressure from the agricultural industry and Iowa farmers in recent years to increase funding for rural and farm to market roads repairs. The Iowa DOT estimates an annual road funding gap of $215 million.

Rep. Greg Heartsill, a Republican representing southeast and south central portions of Jasper County, told the Newton Daily News in December he felt the formula for appropriating money from Iowa’s road use tax fund favored urban infrastructure— a problem he sees as an inequity given the greater portion of Iowa’s roads are farm-to-market and secondary systems and located away from the major cities. Roughly 90,000 miles or 78 percent of Iowa’s 114,000 miles of roadways are maintained at the county level.

Eminent Domain Debate:

Leader in both the House and Senate sent signals Wednesday that eminent domain might be a topic of debate during the 2015 session, triggered by two high-profile energy projects slated to be considered by the Iowa Utilities Board for approval.

Texas-based Energy Transfer Partners will file a permit later this month to build 343.43 miles of crude oil pipeline through the state as part of a 1,134-mile project connecting the North Dakota Bakken and Three Forks oil fields with Patoka, Ill. Approximately 33.73 miles of the proposed 343.43 miles of piping to be laid in Iowa will go through Jasper County’s boundaries.

The second project on IUB’s plate is the proposed Rock Island Clean Line consisting of 500-miles of high voltage overhead power lines transmitting wind energy through the northern and east-central portions of Iowa. Both projects would utilize eminent domain laws to build on privately owned property.

Although the parties disagree over the public good and potential economic benefits of an oil pipeline, there is a weariness on both sides to over utilizing eminent domain laws to acquire privately held land for these projects. Both Gronstal and Iowa House Speaker Kraig Paulsen gave indications that the legislature would weigh in on the laws governing the fate of both the clean line and pipeline. Paulsen said he “fully expects” legislation to be introduced into the house addressing issues of property condemnation for public projects.

The governor, who appoints the three-person IUB, said Wednesday he doesn’t see a need for congressional intervention disrupting current eminent domain laws and to influence the two energy projects.

“I think it would be a mistake to get politics into this. I think we should abide by the processes that have been put in place,” Branstad said. “We have thousands of miles of pipeline through the state of Iowa. I’ve seen the map and virtually every county has a pipeline going through it in some way or another. I feel because of the value of our farm land here in Iowa that if anyone is going to build a pipeline ... they need to be careful that if they go through that the tie lines are repaired and the value of the land is not diminished.”

Contact Mike Mendenhall at mmendenhall@newtondailynews.com