Borg: Gaping potholes. Aging bridges. Trails and rails go begging. Iowa legislators view needs and weigh the costs. We're questioning legislative transportation committee leaders Tom Rielly and Dave Tjepkes on this edition of Iowa Press.
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On statewide Iowa Public Television this is the Friday, January 30th edition of Iowa Press. Here is Dean Borg.
Borg: If the Iowa General Assembly follows Governor Chet Culver's vision there's major work ahead in Iowa's infrastructure. This includes streets, highways and bridges showing their age but without adequate repair money. For example, just one legislative session ago it was estimated that Iowa's road fund lacks some $220 million for just doing needed maintenance and presumably the tough winters are still taking a toll so the tab is probably considerably higher now and that's just the roads portion of Iowa's infrastructure needs. Democrat Tom Rielly of Oskaloosa chairs the senate's transportation committee and Gowrie's Dave Tjepkes is the ranking republican on the house transportation committee. Gentlemen, welcome to Iowa Press. You didn't cross a bridge getting here did you? Across the Iowa Press table Des Moines Register Political Columnist David Yepsen and Associated Press Senior Political Writer Mike Glover.
Glover: Senator Rielly, let's start with you. Probably the hottest flash point of this legislative session when it comes to transportation is the gasoline tax, suggestions that it be increased. What is your best forecast of the prospects of that this year?
Rielly: Well, I think we're going to move the bill forward and I think we're going under this under the guide that we really want to try to put money back towards our aging roads. We have addressed the safety of our roads and frankly we want to start putting people back to work.
Glover: And the two team up?
Glover: Representative Tjepkes, same question to you. What are the prospects this year for a gasoline tax increase? And tell us your own personal view.
Tjepkes: Well, I think we look at the roads and structure system where we are today compared to a couple of years ago. We did the Time 21 study which outlined all of our needs and we had some transportation funding study committee meetings and it would determine that the findings of that Time 21 study which asked for an additional $200 million per year towards infrastructure, highways and bridges, was a valid goal and we're continuing towards that goal. As you know last year we passed the Time 21 where we made adjustments in vehicle registration. However, those dollars are adding up to about $115 million by the year 2010 so that still leaves a gap between that and the $200 million and that needs to be addressed.
Glover: What are the prospects for that?
Tjepkes: I think depending if the democrats put a bill forward I think the republicans will be willing to work with that.
Glover: Senator Rielly, there is a governor of your own party who is sending what many people interpret as mixed signals on this. Last year he said I don't want a gas tax, if it lands on my desk it's going to get vetoed. This year he's not saying that, he saying I don't want a gas tax but I'll let them do your thing. What influence does that have on the legislature?
Rielly: Well, I'm sensitive to the Governor in that I think his concerns are genuine and I know they're valid and they're definitely real and I have the same concerns. But I also think the Governor is a reasonable guy and it is my job as chair of the transportation committee -- let's put this in total here -- over the next 20 years we're looking at about a $29 billion shortfall in what we should be putting towards our roads and bridges. That is just shy of $1.4 billion that we should be doing this year. And we're only talking about 267 million of the most critical areas, that's really what we're trying to address in this issue.
Yepsen: Senator, how much are you talking about? A nickel increase, a ten cent increase?
Rielly: I'd say eight to ten cents.
Yepsen: Let me put a finer point on this. Are you a yes or a no vote on an eight or ten cent increase in the gas tax?
Rielly: Me, I would be a yes vote.
Yepsen: And Mr. Tjepkes?
Tjepkes: I would tend to support a gas tax increase under certain circumstances. We need to more properly evaluate the total need. The DOT came out with the critical needs assessment or criteria that said that $200 million that we were originally talking about now has risen to ...
Yepsen: Well, let me follow up on that -- you're not answering my question yes or not at this point, right? You don't know where you are?
Tjepkes: That's correct.
Yepsen: How credible is the DOT on this when every couple of weeks they come out with a new report saying it's gone up another $60 million or $30 million in December to $267 million now?
Tjepkes: Well, I think they are credible because the basis of the numbers and everything that we're talking about goes back to that TIME 21 study. That TIME 21 study that was made up of city, county, economic individual folks used the $200 million criteria assuming that was implemented. Now we did do the vehicle registration fee but we grandfathered that in so we did not get that full first $100 million that the plan called for. So, there is that slow start on the registration fees.
Glover: I know you're a republican and you're in the minority and you have a democratic governor -- what do republicans need from a democratic governor as a type of political cover you would need to support a gas tax increase?
Tjepkes: First and foremost, leadership.
Glover: So, he has to come forward and say I want a gas tax increase?
Tjepkes: He has to indicate that he would not veto that, that he would support that.
Glover: Senator Rielly, same to you, what do you need from your governor?
Rielly: Well, I think it starts with me. Let me put it this way, I consider myself a pretty conservative guy and it's not like I'm just doing this on a whim. Over the last two years I have traveled throughout this state, I have listened to economists, I have listened to researchers and when we take a look at all the research I'm open to all kinds of ideas but to this date the only thing that I know, let's just use ten cents as a nice round number, a ten cent increase in the gas tax would generate $220 million this year. It would cost the average Iowa driver, according to research done by a professor from the University of Iowa, he's a Ph.D. who deals with this, about $50 a year and 20% of that is paid for from people outside of the state of Iowa.
Yepsen: Senator, if you don't do the gas tax for whatever reason are there other options for getting this money?
Rielly: There are other options -- the bonding has been floated out there, titling is something we've considered, we've looked at severance tax on ethanol.
Borg: Severance tax means?
Rielly: There are certain states when you, for example, the oil states as they export their oil there is a severance tax that they generate. Some would argue we should do that with ethanol. I'm cool to that because we're in the early stages of growing an ethanol industry.
Yepsen: Mr. Tjepkes, are republicans trying to have it both ways? You come from northwest Iowa. I see some republicans up there who say we've got to do something about Highway 20, we've got to make that four lane. Then you come down to Des Moines and they won't vote for a gas tax increase that would pay for that. What kind of game is that?
Tjepkes: Well, I don't think that's really totally fair to all republicans because we have to look back where this whole process started. The Time 21 study process started back in 2005 when the legislature had a republican majority in the house. The republican leadership then asked for a study of our transportation infrastructure needs. That generated the Time 21 study and that is the basis of what we're using today. And plus that transportation funding study committee was made up of four democrats and four republicans.
Yepsen: That's not my question, Mr. Tjepkes, if the republicans from northwest Iowa don't want to support a gas tax increase why don't we send the dollars some place else? Council Bluffs, they need roads and they need them going down towards Oskaloosa.
Tjepkes: Well, first of all, this is not all about Highway 20. Since we implemented Time 21 highways in Linn County, Blackhawk County, Interstate 380 for instance is doing a major construction project. Some work is being done on Highway 20 but there's about seven or eight other counties that are affected by this. This is not just a northwest Iowa bill, this is a state of Iowa transportation bill.
Rielly: All of this started really, as you're saying, when we were at the 25/25 split and then last year we did a lot of the heavy lifting but we did it in a bipartisan manner. I had a wonderful working relationship with Senator John Putney and I've grown to know Dave Tjepkes here and we have put aside our partisans, it doesn't mean that we don't have concerns on both of us, but we did an incredible amount of good work in a bipartisan manner that started off the Time 21 fund. Again, we're talking about minimally $5 billion we've got to come up with in the most critical areas over the next 20 years.
Borg: What I hear you saying is that -- just ascertain whether or not this is correct -- do I have it right that you're saying you are the go-to guy if we pass legislation increasing the gas tax in the house and the senate and lay it on Governor Culver's desk he's got it and it's his ball to handle?
Rielly: I think for me I guess when I was referring to that is I've got to make a case as to how are we going to come up with enough revenue to start fixing our roads. The road use tax fund is becoming, it's running out of money simply because the revenues have been flat and the expenses have been going through the roof.
Yepsen: But, Senator, as a practical political matter democrats in the legislature are not going to vote for a gas tax increase because of the possibility Chet Culver is going to veto it. That doesn't make sense that you would walk the plank ...
Rielly: I understand that but I think we should also be able to make a case that this is a plan that is going to hit the average Iowan the least in the pocketbook, it's going to be fair, it's going to be equitable, it's going to raise the money to put people back to work and it's going to fix up our state's roads and most importantly it's going to be a vehicle to be able to get people outside the state of Iowa to help start fixing up our roads.
Glover: So you're going to make the assumption given his position right now if you land it on his desk he'll sign it?
Rielly: I think we need to make that case. And maybe the gas tax isn't it but I have yet to have anybody come out and say, you know what, this is a better plan that creates $220 million or $200 million, it will hit the average Iowan the least in the pocketbook, it includes people from outside the state of Iowa, it's Constitutionally protected. If we create $200 million that's 10,000 jobs that will be created and road building jobs are good paying jobs.
Borg: How does anticipated federal assistance on this figure in?
Rielly: Monday Nancy Richardson addressed our transportation committee, the head of the DOT, and we're working off of what the house version of the stimulus package would be, I think it's estimated right around $340, $350 million is what the state would receive if it all comes down. I think $250 million would go to the state and about $117 million would go towards brown numbers ...
Yepsen: Bottom line, Senator, is you think you're going to still need additional state gas tax revenues no matter what the federal government does?
Rielly: Again, we've got to come up with $267 million a year for the next 20 years.
Yepsen: Do you agree with that, Mr. Tjepkes?
Tjepkes: Yes, federal money will be a one time shot. For funding the roads you have to look for a reliable source of revenue that we can plan for the long-term. Most road projects take at least five years in planning. You have to have engineering studies, environmental studies, you have to buy the property on which to build the road and then you have to let all your contracts. So, it's absolutely critical that we have revenue going into the road use tax fund that is reliable and dependable so we can plan accordingly.
Glover: Senator Rielly, let's talk about some real money. The Governor has put on the table a $700 million plan, you referred to it earlier, a big hunk of that would go towards transportation infrastructure. How much of it do you think would go to transportation infrastructure? And will it pass?
Rielly: That remains to be seen. One of the things is that I'm keeping an open mind to that. I think as we look at this proposal the one thing I would caution, particularly as it relates to roads and bridges, I want to make sure that if that is part of it that the bond doesn't outlive the project. In other words, we bond a few hundred million dollars for a road and it's paid off over 15 years and then all of a sudden we need to redo that road again. So, I think I'm willing to keep an open mind but we've got to be very cautious about how we structure these bonds.
Yepsen: Senator, you mentioned a moment ago toll roads. There are other options. You mentioned the severance tax. There is one idea that the gas tax would go up as the price of gasoline goes down and the tax would go down as the gasoline goes up, sort of a flowing thing. I want to talk about some of these other ideas. Why not do toll roads? They do them in Illinois. They do them in Indiana. They do them in Kansas. Those are pretty nice roads and most people don't look much different than the people in Iowa. Why don't we start doing some toll roads?
Rielly: Let's take Illinois as a perfect example. Chicago proper is three million people. When you start adding in the suburbs they get up around 22 million people. We're a state of three million people and we have done the research on tolling, we've looked at these numbers. It will generate enough revenue to build the tolls and man the tolls and that is about it.
Yepsen: How do they make it work in Kansas?
Rielly: It depends -- again, look at the populations, you take a look at Kansas City. Also some people say probably the most viable place for us to do a tolling would be on I-80 and the feds would preclude that. There is a test area in Pennsylvania that will allow that but I-80 is off limits.
Yepsen: What about the idea of the flexible tax?
Rielly: Well, in my conversation we talked about that too. There has been particularly as it goes up a lot of people are saying that is a tax increase without coming back to the table. Do we really need that? There has been some resistance about -- Wisconsin is a perfect example. They index their tax and they are second highest in the nation right now with their gas tax.
Yepsen: And Mr. Tjepkes, what about this notion of getting away from this galonage tax since we've got more efficient cars than ever before and going to a mileage tax? Some ideas some people think a bar code on the roof of your car or the government records how much you drive. Why don't we tax people based on how much they drive or the size of vehicle that they drive?
Tjepkes: I believe one state west some place is experimenting with that process right now. It still comes back to how do you implement something like that. So there's a lot of unknown problems with how do we retrieve that tax.
Glover: More of the basics, Mr. Tjepkes, most of the conversation about how you finance roads comes back to the gas tax. Republicans are here. Democrats are there. Are republicans open to some of these other ideas? Are you willing to talk about something like toll roads or some other kind of a different way of financing roads?
Tjepkes: Yes, and, again, we already have done that with the highway funding study committee. We explored a lot of those options. That was all part of the Time 21 study. We looked at all those various options and we made our recommendations to the legislature from that study. So, we have a very good basis on which to look at funding sources, revenue sources.
Glover: Give us an example of some of those other funding sources you might be willing to take a look at.
Tjepkes: Some of those other funding sources were tolling, we looked at bonding, we compared I think the state of Missouri that did a considerable amount of bonding.
Glover: Do you like the Governor's bonding idea? Senator Rielly seemed to have some reservations about it from the Governor's own party. How about you?
Tjepkes: I'd have some very serious reservations about the bonding concept for roads. Bonding has a very appropriate role in governing but it's usually like for vertical infrastructure like buildings and that sort of thing. Highways we come back to the pay as we go concept but we need that reliable source of revenue that we can depend on that we let contract sometimes a year or two years ahead of time. We have to know that funding stream is there and that funding stream is dependable and generally speaking the gas tax and vehicle registration fees which are constitutionally protected, they can not be moved to other aspects of any state government.
Borg: Does that include, Senator Rielly, surcharging certain vehicles, especially heavy weight vehicles?
Rielly: Well, we did do some adjustments on that last year. That was part of it, of what we did last year. And, again, as we're working through this, this isn't something that we're just starting our talk about. We have been looking at this for two years. And, again, the prospect of the words coming out of my mouth saying I'm real supportive of a gas tax, politically that's dangerous. But I have looked at everything that's out there and I have yet to see anything that is more equitable and can generate the kind of revenue ...
Yepsen: Senator, what about the argument the Governor makes that raising taxes in a recession is a bad idea? A lot of economists have said that. That isn't some ideological statement. How do you respond to your constituents who say I can't afford to pay more gas tax?
Rielly: I agree with that but the problem is if we let these roads go further we're already losing people out of the state. There's road building jobs right now, there's plenty of work to do but there's no work to be done. This would be a mechanism to try to invest into our state to put those people back to work. Again, anywhere from 5000 to 10,000 jobs could be created. We're going to improve the safety of our roads. And it will improve economic development.
Glover: Let's go back to the fundamental question that we asked of Senator Rielly. This model that you have of the way we finance roads in the state, gas tax, vehicle registration fees, is that the right model? Is there a better way to pay for roads? Should we think outside the box and come back with a different way of doing this?
Tjepkes: Well, first of all, I think it's a very effective model. It served Iowa very well, the pay as you go concept. But during the study part of the charge from the study was that the DOT continued to look at other models and other projects and every so often they provide an updated report on any new ways of funding roads.
Yepsen: Senator Rielly, I want to give you a chance to make farmers mad. One of the reasons that roads are torn up in this state is agricultural manure wagons drive up and down them and break them up, you've got big grain trucks at harvest time going over thin roads cracking them up, you've got ethanol industries and wind factories that are being built out in rural Iowa, lots of trucks driving around. It's a long winded question to simply ask you isn't it time that rural Iowans start paying a little bit more of the share of busting up our roads?
Rielly: I would say it's bigger than that. I think there has never truly been an assessment of our rural infrastructure as far as particularly now with our growing bioeconomy we've never done a true assessment of that. I'm sure there are plenty of roads that right now there are counties that are streamlining those roads. But we've never done a true assessment of saying, okay, based on exactly what you said as far as our growing ethanol or soy biodiesel or the livestock market or the corn and the soybeans do we need that kind of infrastructure? And better yet could we put some of that infrastructure, some of those roads back into production? But we've never looked at that.
Yepsen: Mr. Tjepkes, how do you feel about this question of rural Iowa paying more of a share of breaking up roads?
Tjepkes: Well, I think first of all it is fair and equitable to a large degree already when you talk about some of the vehicles that cause damage to our bridges and so forth. Counties do have the authority to place embargos on those roads and they do have authority to place weight restrictions. So, they are -- farms are applicable to those rules and regulations.
Glover: Senator Rielly, we've mentioned ethanol and other alternative fuels in passing now. Step back and take a look at the way this state taxes ethanol, the way it incents ethanol. Are we doing all we can to take advantage of ethanol? Should we go in different directions? What do you think about our policy towards ethanol?
Rielly: I'm very supportive of it. I think we've done a good job. I think the ethanol industry has supported this economy when other states have had some problems with this. So, I'm very supportive of not just the ethanol industry but the entire bioeconomy. There's a proposal should there be an increase -- right now there is no difference with ethanol between premium gas and ethanol there is a two cent tax break. Why can't we do that for soy biodiesel?
Glover: Representative Tjepkes, same question to you. Are we doing all we can for ethanol? Should we do more?
Tjepkes: I think we're doing fairly well with ethanol. It's in some challenges right now. But if you look at the economy in Iowa, especially the last several years, the agricultural economy was the only segment of the economic part of Iowa that was really growing and that is attributable to the ethanol industry.
Glover: The tax breaks for biodiesel that Senator Rielly just mentioned?
Tjepkes: I think the current status of ethanol and the way we manage it is about as good as we can do for the time being.
Yepsen: Senator Rielly, we've only got a couple of minutes left. I want to get to some other forms of transportation here. We talked about the gas tax but what about other things like rails, Amtrak, building trams? Is the legislature looking at anything to do that in lieu of building more roads everywhere?
Rielly: Yes, there is a proposal to extend rail, passenger rail from the Quad Cities over to Iowa City at this point and connect it all the way over to Chicago.
Borg: What's the legislature got to do with that?
Rielly: Well, we would have some funding to help complete that study.
Borg: How much?
Rielly: I think it's right around $1.5 million and then another $1.5 million up by Dubuque.
Yepsen: They've been talking about that for years. What makes you think it's going to happen now?
Rielly: A lot of it will also depend on Illinois, what could happen over there.
Glover: Are you in discussion with people over there about this?
Yepsen: Mr. Tjepkes, what is your view on these other rail, trams, mass transit? You haven't mentioned any of those things as a way to avoid having to build so many roads.
Tjepkes: Well, we have talked about those. In the Time 21 bill the DOT is mandated by that legislation to explore those options. That is part of the policy that we have transportation, a lot of it was established by the Time 21 bill that we did last year.
Borg: Is it going to see the light of day this session?
Rielly: I think a portion of it could. If I could as far as this gas tax -- we're not the only ones. It is backed by the Farm Bureau. They are endorsing a gas tax increase. Business groups are endorsing a big gas tax increase. Some of the most fiscally responsible or conservative people, they are endorsing a gas tax increase.
Borg: I have to leave it there with that endorsement. Thanks gentlemen for being with us today. On the next edition of Iowa Press conversation with the leader of the Iowa senate's democratic majority Mike Gronstal. Next week legislators will have digested the nuances of Governor Chet Culver's actions to balance the state's budget for the current fiscal year and his austere plan for next year. Senator Gronstal will be giving insight into legislator's plans. You'll see Iowa Press at the usual times next week, 7:30 Friday night and 11:30 Sunday morning. I'm Dean Borg. Thanks for joining us today.
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