GOP lawmakers move to chop forest tax break; Dems criticize post-derecho timing

An Iowa legislative committee advanced a bill that would take away a 100% tax exemption for forest reserves. (Photo by Trevor Pye via Unsplash)

Iowa GOP senators on Thursday advanced a bill they see as a long-overdue reining in of undeserved forest reserve tax breaks for land that in some cases doesn’t qualify.

Democrats called the legislation as ill-timed as Iowans try to recover from an August derecho that flattened 25% of the state’s tree canopy and as the state fights chronic water pollution. 

The Senate Natural Resources and Environment Committee approved Senate File 112 on a vote of 8-3. Democrats Claire Celsi of West Des Moines, Sarah Trone Garriott of Windsor Heights and Nate Boulton of Des Moines opposed the bill. Democrats Rob Hogg of Cedar Rapids and Jim Lykam of Davenport were excused from the meeting. 

In an interview before the meeting, Hogg criticized Republicans for raising taxes on the land and standing in the way of derecho recovery. “This is totally tone deaf,” Hogg said. “Do they not understand the derecho? It’s unfathomable they would do this after that destruction.”

Hogg’s home city, Cedar Rapids, lost half of its tree canopy to the August 2020 storm, which brought hurricane-force winds across a broad swath of Iowa. “Now they have the cost of recovery and taxes, and (lawmakers) haven’t done a thing to help. It’s terrible,” Hogg said.

Sen. Ken Rozenboom of Oskaloosa, who joined GOP colleague Sen. Amy Sinclair of Allerton to introduce the bill, said the reserves are important but some landowners have cheated the system to get tax breaks they didn’t deserve. 

“It’s a big deal to some rural counties in Iowa,” Rozenboom told committee members. “It’s a good program in the state of Iowa, and none of us have an interest in doing harm to that good policy. But in my view, and in the view of many in my district, this particular program has not changed in many, many years and is wide open to some abuse.” 

The original tax break legislation passed in 1906.

Rozenboom said the bill is a compromise aimed at preventing an inappropriate “tax shift” by some landowners. He noted that he owns land that would qualify for the current 100% tax break, but he never applied for it because that would shift a tax burden to others.

Currently, forest reserves as small as two acres can get standing 100% tax breaks. The bill would reduce the tax break to 75% of the property value, would require a minimum of 10 acres, and would set a limit of five years for each exemption for applications beginning Jan. 1, 2022. 

Trone Garriott criticized the bill. She said Iowa’s limited forest supports a significant wood industry and helps reduce water pollution. 

Celsi objected to language that would require the Iowa Department of Natural Resources, rather than the agriculture department, to certify the land qualifies as a reserve. The bill provides no money to DNR, which disbanded its separate forestry bureau in 2017 after lawmakers cut the agency’s budget.

In answer to a question from Celsi, Rozenboom said the state did not do a financial study to estimate the cost to DNR.

The bill now is eligible for debate by the full Senate.