Members of Iowa’s two key environmental panels got several doses of reality Wednesday about whether Gov. Kim Reynolds’ endorsement of a special sales tax would be a big boost to the Iowa Department of Natural Resources’ previously shrinking coffers.
The governor-appointed Environmental Protection Commission and its sister panel, the Natural Resource Commission, held their annual joint meeting amid optimism that approximately $150 million more funding could be headed to the Iowa Department of Natural Resources. That’s if lawmakers approve the sales tax increase needed to fund the voter-approved and constitutionally protected trust fund voters created a decade ago.
State Rep. John Wills, a Spirit Lake Republican who attended the meeting and has been active in water-quality issues, told commission members part of the Republican governor’s plan won’t fly with her own GOP allies, at least in the House of Representatives. In order to offset the sales tax increase and achieve a net tax cut, the governor wants to accellerate income tax cuts approved in 2018. She’s proposed that lawmakers waive a requirement that the state show steady 4 percent revenue growth before one of the next income tax cuts takes place.
“One change I can tell you right now, the House won’t go for is she proposes to do away with the 4% trigger for the 2024 tax cuts. The House won’t do that,” Wills said after a commissioner asked him about the chances lawmakers will pass the sales tax increase that would be offset by income and property tax cuts under Reynolds’ plan. “We’re going to have to negotiate and see where that’s at. All and all, though, I think there is a good chance of success (for the added funding) — greater than 51%.”
Marcus Branstad, vice chairman of the Natural Resource Commission, raised questions about how much of DNR’s existing appropriations will be lost as some programs are shifted to the protected Iowa Natural Resources and Outdoor Recreation Trust Fund. The trust would be funded by part of a increase in sales tax proposed by Reynolds in her latest budget request. Backers of Iowa’s Water and Land Legacy, or IWILL, have been pushing lawmakers to increase the sales tax by at least three-eighths of 1 percent in the 10 years since Iowa voters overwhelmingly approved the currently empty trust fund.
In 2013, Branstad was appointed to the resources commission by his father, then-Gov. Terry Branstad, now U.S. ambassador to China and mentor to Reynolds. Reynolds was lieutenant governor under Branstad.
Marcus Branstad said he’s concerned about whether DNR will see additional money after years of budget cuts.
“My guess is we will have no idea what our net (funding) will be until this shakes its way through the Legislature,” he said. “We will not know which legislative appropriations will go away. Because now that we (may) have a dedicated funding source, I’m guessing we will actually lose a significant amount of legislative appropriations for specific programs.
“I’m really interested in what the net increase in new spending is going to be because everybody in the room knows we’ve been dealing with status quo budgets for a long time, and our historical budget appropriations from the Legislature have been dramatically decreased over the last 15 years,” Branstad said.
He added: “I am hopeful. This is great. This (the sales tax increase) is what the voters wanted.”
DNR Director Kayla Lyon said the sales tax increase specifically would mean $99.5 million a year for water quality work and $52.3 million a year for natural resources and conservation. The popular Resources Enhancement and Protection program, known as REAP and scheduled to end next year, would be extended under Reynolds’ proposals. The program has financed trails, campsites, hunting areas and the like since 1989.
Lyon said the details of which programs will get bigger budgets and which ones will merely shift to the new fund depends on lawmakers’ negotiations.
“We’re excited to see what this means for the department,” Lyon told commissioners. “We know that this will increase funding for the department but we also know it will change how some of the other funding is distributed. Some will be supplemented and some will be supplanted.”