Branstad wants to keep Iowa school infrastructure tax, water quality linked

DES MOINES - Gov. Terry Branstad said Monday he is interested in working with legislators to expand state funding for water quality this session, but he likely would not support extending a school infrastructure sales tax set to expire in 2029 if a share of that money is not part of the long-term plan.

Republicans in the Iowa House say they plan to roll out a proposal this week to fund large-scale water quality initiatives without diverting funding from education, as the governor had proposed. Instead, the House GOP approach would fund water-quality programs out of a water metering tax that currently generates about $28 million to the state's general fund annually.

Branstad, who had proposed tying water quality and school infrastructure together in a bold, long-term strategy to address both priorities, conceded Monday that his idea may not be embraced in one year, and he would be willing to work with lawmakers to address water quality needs this session.

However, he made it clear he has not given up on his long-term plan to extend by another 20 years a law dedicating a penny of state sales tax to school infrastructure - a tax set to expire in 2029 - and dedicate proceeds in excess of the first $10 million collected annually for school building needs to the environment. Schools would still be getting $20.7 billion for infrastructure otherwise funded by property taxes, while $4.7 billion would be channeled to improving Iowa waterways.

'I'm very hopeful that we'll make progress on that this year (water quality) and we'll continue to monitor the situation with regard to the extension of the funding for school infrastructure,” Branstad said.

Education advocates want lawmakers to approve a 20-year extension to the statewide Secure an Advanced Vision for Education (SAVE) Fund that generates funds for school infrastructure projects. In 2008, lawmakers designated a penny of the state tax collected on every dollar of eligible sales in Iowa and designated a Dec. 31, 2029 sunset on the legislation.

The time frame matched the typical bonding period for property-tax backed construction projects. However, school officials say they are encountering financing challenges with the sunset less than 14 years away, and are having to shift to bond issues for property tax proceeds to fund building projects.

'I understand that they would like to do that, and I have offered a plan that would make that possible,” Branstad told reporters Monday. 'But they're saying, no, we don't want to do anything for water quality, we want it all. And I'm saying, wait a minute, we've already invested billions of dollars, we're willing to invest billions more, but we think there is another critical issue that needs to be addressed, and that is water quality and we have a plan to do that.

'We're willing to and interested in working with them, but we don't think anybody has the right to say we're entitled to this forever,” the governor added.

'I understand there are some people in the Legislature that think it's something they're not willing to take on at this point in time,” Branstad said. 'But I think as we continue to educate people of the benefits it would provide … that there's an opportunity to grow and build support for that kind of long-term, reliable source of funding.”

A measure to extend the Secure an Advanced Vision for Education (SAVE) Fund to Jan. 1, 2050, was passed 37-13 by the Iowa Senate last session, but has not been taken up in the Iowa House.

l Comments: (515) 243-7220; rod.boshart@thegazette.com