Sara Carmichael, executive director of the nonprofit group Iowa Rivers Revival, speaks at the Iowa Statehouse Wednesday in favor of a sales tax increase to pay for water quality work and outdoor recreation projects. (Photo by Perry Beeman/Iowa Capital Dispatch)
Iowans are demanding action now on a 10-year-old proposal to use a new sales tax to pay for conservation, water quality, trails and public land, an aide to Gov. Kim Reynolds said Wednesday.
The governor will extend her string of nearly a dozen town halls about that proposal and other parts of the Invest in Iowa Act until the House and Senate act, said Reynolds communications director Pat Garrett. So far, the full House and Senate haven’t taken up the legislation, considered one of Reynolds’ top proposals for this session.
Environmental groups filled the Capitol rotunda for a couple of hours Wednesday to support IWILL, or Iowa’s Water and Land Legacy. Voters approved IWILL a decade ago, but until this year committees largely ignored the proposal and there never has been a full floor debate.
IWILL envisioned a three-eighths of one percentage point sales tax increase to provide steady funding for trails, parkland, conservation work on farms, and efforts to improve water quality through a constitutionally protected fund.
Reynolds has tweaked the decade-old spending formula in part at the suggestion of farm groups that want more money for farms and less for trails. She then rolled it into the Invest in Iowa Act, which would fund local mental health services through the sales tax, reduce income and property taxes, and extend REAP, the Resources Enhancement and Protection program. REAP would get more money for public lands and the like under Reynolds’ proposal.
Garrett said 70% of the comments at a series of town halls on the act have been positive. There has been some talk of even deeper tax cuts than Reynolds sought.
Some Iowans have noted that sales tax increases are regressive in that they take a higher percentage of low-income people’s pay. Reynolds has proposed added exemptions to the sales tax for things like diapers to ease the burden.
Though the Invest in Iowa Act hasn’t cleared a committee yet, Garrett does not think it’s in danger.
“The 2018 tax cuts took almost the whole session,” Garrett noted. “It just takes time.”
The governor has proposed using $100 million a year from the sales tax for water quality work, and $55 million for outdoor recreation and conservation.
The governor is steadfastly pushing for action this session. “The governor expects the House and Senate to take action this session, and so do the people who have been coming to these town halls,” Garrett said.
“The governor will continue to have these town halls until action is taken,” Garrett said. He added that while the proposal could be tweaked, Reynolds will insists that the plan result in a net cut in taxes, funding for mental health, and the dedicated sales tax support for water quality and conservation.
House Speaker Pat Grassley said work on the bill continues.
“House Republicans are continuing to review the governor’s proposal but have not made a decision yet on how to move forward,” said Grassley, R-New Hartford. “Tax and budget conversations usually don’t happen until later in the session and this is a very large piece of tax policy with several moving parts. Our members and our constituents also have many different ideas on this topic as well. This is all about building consensus and we are still working to reach that point.”
Senate Majority Leader Jack Whitver, R-Ankeny, said discussions have revolved around tax relief and have included “many of the same concepts as the governor.”
“Our priorities are moving mental health funding away from property taxes, reducing income taxes and property taxes, and replacing a portion of that revenue with consumption taxes,” Whitver said. “Proposals with this level of complexity take time and we continue to work with the House and the governor. Senate Republicans remain committed to significantly reducing the tax burden on Iowans.”
As lawmakers continued to debate the bill privately, backers came out in force at the Statehouse Wednesday.
Jennifer Terry, executive director of the nonprofit Iowa Environmental Council, encouraged the dozens of people gathered at environmental-group displays to lobby their lawmakers in favor of IWILL. She pointed to a string of successes in environmental lobbying. Last year, many of the groups fought a bill backed by MidAmerican Energy that they considered bad for Iowa’s budding solar industry. The bill was sidelined until this session, when a compromise bill was negotiated that will allow the industry to expand.
This year is an important moment for environmental issues, too, Terry said. “We watched this session kick off with the governor pledging her interest to fund the trust,” Terry said. “There’s still work to be done on that bill, but together our voices can call for the changes that will fund our natural resource priorities, while staying true to the original integrity of the formula Iowans voted on in 2010.”
Shannon Ramsey, president and CEO of Trees Forever, said the Natural Resources and Outdoor Recreation Trust Fund, which would be filled by the sale tax, fits in with Iowans’ support of the environment.
“The trust fund is worth the fraction of a penny sales tax,” Ramsey said. “Iowans value trees and forests, and we need a budget and policies that reflect our values.”
Sen. Pam Jochum, D-Dubuque, encouraged her legislative colleagues to act. “It is long past time to fund the Natural Resources and Outdoor Recreation Trust Fund, and it’s long past time to clean up Iowa’s waterways and restore funding to the Department of Natural Resources so that it can fulfill its mission of protecting our environment.”
A week ago, Sen. Jake Chapman, R-Adel, chairman of the tax-writing Senate Ways and Means Committee, said the bill appears to have wide support but some have raised questions. “Our caucus has made it very clear that we want to see deep tax cuts,” he said. “… But we also recognize that these aren’t just priorities of the governor, these are priorities of Iowans.”
Among Democrats, Sen. Joe Bolkcom of Iowa City has been particularly critical of what he sees as a tax shift from wealthy Iowans to poorer ones as the sales tax increases in part to pay for income tax and property tax cuts. Bolkcom has been a longtime supporter of improving Iowa’s environment but has said he doesn’t like Reynolds’ financial approach.
“We’re looking at a massive tax shift as we raise a regressive sales tax $540 million and see this major income-tax cut,” Bolkcom said.
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