Economists: Raise IA Gas Tax

By: WOWT & Associated Press Email
By: WOWT & Associated Press Email

Two economists say increasing Iowa's fuel tax would help the state in the long run and be relatively painless to consumers.

Speaking Friday on the public television program, "Iowa Press," Iowa State University economist David Swenson argued a 10 cent per gallon increase in the tax would cost the average family about $32 a year.

He says that cost is worth it because of the overall benefit from road improvements financed by the tax increase.

Creighton University economist Ernie Goss agrees, saying a poor road system would hurt the ability for Iowa's economy to expand.

Swenson also notes that about half of the fuel tax goes to support local government programs.

Iowa Governor Terry Branstad has said an increase in the gas tax is likely but not in 2012. He has asked the state transportation department to find $50-million in savings to avoid an increase. However, he says an increase is more likely when you consider a projected $200-million annual shortfall.

Some state lawmakers have called for a phased-in gas tax increase.

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