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Gov. Branstad talks gas tax, manufacturing in Mount Ayr

Published: Wednesday, Oct. 2, 2013 10:43 a.m. CDT • Updated: Sunday, Oct. 6, 2013 5:34 p.m. CDT
Iowa Gov. Terry Branstadspeaks at Mount Ayr Public Library Tuesday during a town meeting with local citizens. Lt. Gov. Kim Reynolds was also there.

MOUNT AYR — Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds visited Mount Ayr Tuesday for a town hall meeting, and Branstad touched on local issues of gas taxes, infrastructure and manufacturing.

Gas tax

“Resistance to the gas tax is really strong,” Branstad said. “The public is against it, about two to one. Plus, gas prices — now they’ve gone down a bit lately — but gas prices are extremely high, and it’s a burden for people to commute to work. So, we’re looking at other things that we can do that would provide money for the road-use tax fund other than the gas tax.”

The gas tax was a piece of legislation voted on in February, but not passed. It would have raised gas prices eight cents to bring in $200 million needed for infrastructure repair across the state.

One main idea Branstad mentioned was to replace the gas tax with an excise tax, which is similar to a sales tax.

An excise tax is a tax on the sale or production of a specific good used for a specific activity within the country. In this case, fuel is the specific good and is used for transportation. Excise taxes are different from sales taxes in that they are higher, per unit and for more specific products.

Another idea Branstad mentioned was to give counties the option of keeping an extra one cent on the excise tax, and the money made from that extra cent would go toward local road funds.

“These are all ideas, and we have said, ‘Let’s go out and talk to legislators and see what kind of support there is, talk to the public and see what kind of interest there might be.’ And he (Paul Trombino, Iowa Department of Transportation director) is going to be doing that over the next several months,” Branstad said.


In light of the closing of Gits Manufacturing plant in Creston, Ringgold County citizens were concerned about what is being done to keep manufacturing companies in Iowa.

“We recognize the importance of manufacturing and reducing the commercial industrial taxes hopefully should help,” Branstad said. “We are also trying to reduce some of the regulatory burdens to make Iowa more attractive.”

Branstad said unemployment in Iowa has gone down, from 6 percent to 4.9 percent, and with it, the unemployment tax in Iowa has gone down approximately $100 million each year in the past two years.

“We’re not going to win every one of those (companies leaving), and that’s the reason why we have a goal of 200,000 new jobs, because there’s always going to be some companies going out of business or going elsewhere,” said Branstad. “For the ones we’re losing, we’re also gaining some significant ones.”

Reynolds said the Branstad administration is trying to reduce regulatory and environment taxes to allow businesses to expand and new businesses to locate in the state.

“We’re also starting to see opportunities for significant investment back in the state of Iowa, too,” said Reynolds. “A great deal of it is export, and we’ve got a lot of companies that have companies over in various countries that we travel to, but that’s really allowing them to expand their businesses here in Iowa, in addition to that. But we are bringing investment back into the state, too.”

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