Ag Policy Blog

Groups Champion Revenue for Ag Infrastructure

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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It wasn't too long ago that the idea of raising any tax was viewed as an anathema. Yet, ag groups are nudging political leaders to step up spending on infrastructure in a variety of ways, whether it's convincing Congress to boost the diesel tax for inland waterways or looking for a tax increase to fund road repairs at the state level.

The National Grain and Feed Association was one of more than a dozen agricultural groups that called on the Senate to pass S. 2955 to increase the taxes on diesel fuel for barge operators as a way to boost financing inland waterways infrastructure.

The Senate bill is comparable to a provision in a House bill that passed on Wednesday. It would increase the diesel tax on barges and tow-boat operators from 20-cents a gallon to 29-cents a gallon. The revenue generated would go to the Inland Waterways Trust Fund.

The Waterways Council, a group representing major barge operators, has advocated for the diesel-tax increase because of the backlog of water-infrastructure projects waiting funding to be built.

The House tacked the same measure on a bill Wednesday that passed 404-17. The provision is now part of the tax-extenders package that was sent to the Senate as well. Senators are expected to vote on the bill next week.

"The increase...is supported by both barge carriers and their customers - the agricultural shippers that include our members - to provide the financial wherewithal to make the necessary improvements to our nation's waterways infrastructure," said the NGFA and other groups in their letter to senators. "This provision is essential to the rehabilitation and maintenance of the inland waterways system, and our future global competitiveness."

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The tax increase is expected to generate $260 million over 10 years for waterways infrastructure projects.

A Long and Lonesome Highway, East of Omaha

The Iowa Farm Bureau Federation his hoping state leaders are able to come to agreement in 2015 on a plan to generate more revenue for road maintenance in the state. Craig Hill, president of the Iowa Farm Bureau, spoke about this at the group's annual meeting on Wednesday in Des Moines. Hill said he thinks Farm Bureau and other business groups may be able to convince Iowans of the need to spend more on road infrastructure.

"I'm very, very positive about this," Hill said. "We have moved the needle over this."

Iowa Gov. Terry Branstad said a few days after the election that he is open to take a look at the options for financing road infrastructure. Branstad told the Des Moines that increasing funds for the state's road-use fund would be a top priority for the 2015 Iowa Legislature.

"The timing is good because gas prices have dropped significantly. That makes it a little more palatable to the public," Branstad told the paper in early November.

Hill said too many counties are going into debt to pay for road improvements and putting more burdens on property taxpayers. Hill said road users should be paying for the upkeep of the roads. "The fuel tax is the most fair and equitable way to do that," Hill said.

Iowa's fuel tax is 22 cents a gallon. The only surrounding state with a lower fuel tax is Missouri at 17 cents a gallon. Missouri taxpayers are carrying about $1 billion in debt. Missouri voters rejected a sales-tax increase last August that would have helped pay for road improvements over the next decade.

Hill said he thinks a 10-cent a gallon increase in the fuel tax would hit the sweet spot to generate about $215 million a year to help maintain Iowa roadways. About 15% of that tax revenue would come from out-of-state drivers filling up in Iowa.

Farmers are often dealing with closed rural bridges or more restrictions on weight limits on bridges and roads. Iowa is ranked as one of the states with the most number of bridges with safety or weight restrictions.

"Our members have been screaming for four or five years that we need to fix our roads," Hill said.

I can be reached at Chris.Clayton@dtn.com.

Follow me on Twitter @ChrisClaytonDTN.

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CRAIG MOORE
12/9/2014 | 11:53 AM CST
Tom, are you really saying that paying less taxes would be a good thing AND, in the same statement, agreeing with anything Jay says?
CRAIG MOORE
12/9/2014 | 11:50 AM CST
Just like a 1099, when you buy the car you report it to the government and report every year beginning and ending mileage and pay for every mile you drive. And it wouldn't be really a new tax, it would adjust the old one to make sure free loaders pay their fair share.
Jay Mcginnis
12/9/2014 | 7:15 AM CST
Well Rush and Hanity say that electric cars and solar doesn't work, you call it a toy so why waste time adding a new tax which is totally against Tea Party philosophy? Besides how would you enforce such a tax, send a meter reader to every house that might own an EV? Just remember Craig, "its a toy" and like solar doesn't work so stick with your monster trucks built for "Montana men".
Bonnie Dukowitz
12/9/2014 | 6:07 AM CST
The government has never ever decreased spending, no matter who was #1.
tom vogel
12/8/2014 | 1:12 PM CST
Jay: I am with you - no new infrastructure taxes! We can agree on that. And yes, you are correct, GHW Bush did raise taxes and we have been paying higher taxes since then. It was a bad move then and it would be a bad move now.
CRAIG MOORE
12/8/2014 | 12:56 PM CST
Jay isn't as smart as he knows he is. If you look back Bush did not allow new taxes to be introduced, but they did raise the percentage of existing ones. Remember that Jay? So what he said was technically true. And how much are you paying with that toy car of yours to drive on the roads that the gas tax is paying Jay? Anyone else notice when Jay doesn't have a good answer for something he just ignores it?
Jay Mcginnis
12/8/2014 | 8:58 AM CST
Just like the GOP, once they get a majority they raise taxes! Remember what GH Bush said in his campaign? "Read my lips, NO NEW TAXES" and what did he do???? Oh and if police have to kill to enforce tobacco taxes just think of the mayhem more gasoline taxes will create! Step up Tea folk and walk the talk, no NEW TAXES! Don't be such hypocrites!!!
tom vogel
12/7/2014 | 5:55 PM CST
We had our chance in 2009 with the stimulus plan to greatly increase infrastructure spending. Unfortunately, less than 90 billion dollars of the nearly trillion dollars actually spent went to infrastructure. We had our chance and we pooped it away. Any notion of "raising taxes" to support infrastructure spending is a farse. If local governments want to spend their newly found agricultural tax revenue (from lucrative agricultural profits of late) on roads and bridges, more power to them. Just don't look for the taxpayers from around the country to support local infrastructure spending.
CRAIG MOORE
12/5/2014 | 1:42 PM CST
How much do the people driving around in electric or natural gas propelled vehicles pay into the road maintenance fund? Time to start charging them an annual tax based on the mileage they drive.