Senate panel chops down plan to raise forest taxes

GOP lawmakers on Monday chopped down a controversial plan that critics said would have raised taxes on Iowa’s private forest land soon after a storm downed 25% of the state’s trees. 

Sens. Amy Sinclair of Allerton and Dan Dawson of Council Bluffs said they decided to hold a Senate Ways and Means subcommittee hearing to gather comments on Senate File 352, but chose not to advance it. Dawson said a new subcommittee hearing could be called if the bill can be amended to address concerns.

The bill, formerly Senate File 112, earlier passed the Senate Natural Resources and Environment Committee. 

It was a rare defeat for the Iowa Farm Bureau Federation, which spoke in favor of the bill as a way to equalize taxes. Similar legislation has stalled in previous years.

One of the harshest critics of the bill, Democratic Sen. Joe Bolkcom of Iowa City, wrapped up his complaints about much of the GOP’s 2021 platform in one comment. 

“This bill will result in clear-cutting,” Bolkcom said. “It will result in fewer trees, and less management. It’s absolutely the wrong direction to go. 

“I know you don’t like public universities. I know you don’t like people voting. I know you don’t like Twitter and Facebook. But I would never have guessed you don’t like trees,” Bolkcom told his Republican colleagues. “This is a bad bill.”

Dawson, chairman of the Senate Ways and Means Committee, said he is looking for ways to address abuses of the tax credit system for forest land.

“This issue has been around the Legislature for a few years,” Dawson said. He has told lawmakers who previously were county supervisors that he would “try to find some possible way forward to start to address these issues.”

Dawson added: “The point of this issue is to figure out some of the bad actors out there who really don’t care about the acres they have, they just want to avoid property taxes.”

An August derecho flattened a quarter of Iowa’s trees. Democrats, including Sen. Rob Hogg of Cedar Rapids, one of the cities hardest-hit by the storm, had rallied opposition to the bill. Hogg has called the measure ill-timed and bad for both the economy and the environment.

Current law allows for a 100% tax exemption for qualified forest land parcels of at least 2 acres. The bill would have reserved the tax credit for parcels of at least 10 acres, while reducing the exemption to 75%, the nonpartisan Legislative Services Agency reported.

In a fiscal note, LSA found that 803,000 acres assessed at $733 million are in forest and fruit tree reserves. With rollbacks, the value of the property tax exemption amounts to a combined $15 million. 

The bill would reduce the state’s share of aid to schools by increasing the amount property owners are paying. The state would save $1.4 million a year through fiscal year 2029, when the savings would increase to $3 million from current levels, LSA reported. But the bill would mean a net property tax revenue increase for local governments of $5.8 million per year through 2029, then $12.6 million a year.

Conservation groups and forestry industry organizations opposed the bill.

Edward Gross, a tree farmer from Fayette County, said his family has tended forest for 120 years. “Yes, we can understand the tax issue, but we also understand the incredible recreation value that our land has provided for the whole community and the county. 

“I have always assumed that forestry legislation will be a positive force designed to solve problems and correct issues and this bill just doesn’t provide that optimism or support for a strong forest preserve program,” Gross said. “This bill does nothing to correct the forest reserve violators.”

Ken Herring, a former Iowa Department of Natural Resources administrator who had overseen state forests, is co-chair of the Forestry Advisory Council. That task force formed when the state disbanded DNR’s forestry division in 2017.

Herring said farmers enjoy a range of tax breaks on land, drainage systems and other parts of their operations, which shifts the tax burden to others. 

“We think it’s unfair to single out an individual industry in the state to look at raising their taxes,” Herring said of forestry. Herring said his own forest land not only lost trees to derecho, but also to oak wilt and emerald ash borer.