Iowa Senate panel supports sales tax hike

DES MOINES - Legislation to raise the state sales tax to fund conservation, recreation and water quality improvements sailed through a Senate subcommittee Thursday but key legislators predicted that its voyage could be short in the General Assembly's partisan-infested, election-year waters.

Two Democratic members of a Senate Ways and Means panel sent the full committee a bill that seeks to increase the state sales and use tax rate from 6 percent to 6.375 percent effective July 1 with the idea of depositing $180.6 million in the voter-approved and constitutionally projected Natural Resources and Outdoor Recreation Trust Fund after one year.

'I believe we can move mountains in the Legislature, but it requires Iowans not to sit on their couch and just expect it to happen,” said Sen. Janet Petersen, D-Des Moines, who supported the three-eighths of 1 percent sales tax hike but told supporters Iowans 'need to get on their phones and they need to email and let people truly know how badly they want this.”

However, Senate Majority Leader Mike Gronstal, D-Council Bluffs, said there are several competing approaches making there way through the legislative process but none - including the higher sales tax - are mustering the 26 Senate votes and 51 House votes needed for passage to Gov. Terry Branstad.

'I would say there are a lot of ships passing in the night and no consensus developing on a funding mechanism,” said Gronstal, who favors a different course that would take a graduated share of the general fund ending balance for water quality improvements when the state's surplus topped $100 million.

Senate GOP Leader Bill Dix of Shell Rock said he wanted more long-term certainty for a long-term funding source that would not include raising taxes as an option.

The House has approved an approach that would shift $478 million over 13 years to water quality projects from a water metering tax and the gambling-funded state infrastructure account, while Branstad wants to share future school infrastructure sales tax revenue with water quality projects as a long-term approach that would not increase current taxes.

Iowans who turned out for Thursday's subcommittee meeting generally were supportive of the 3/8 of 1 percent sales tax increase with Storm Lake Mayor Jon Kruse saying 'people are anxious to see something done” about conservation, recreation and water quality improvements and former legislator Ralph Rosenberg, now head of the Iowa Environmental Council, adding he believes Iowans are 'willing to pay a little extra” to see the voter-approved trust fund come to fruition.

However, Deborah Bunka, an Iowa CCI member from Ames, expressed concern about funding a nutrient reduction strategy that has failed to halt pollution from corporate agriculture fouling Iowa's waterways. Rather than raise Iowans taxes, she said, corporate agriculture has to have some skin in the game: 'They're not contributing to the cleanup and we need to go after them,” Bunka said.

Without a moratorium on large-scale livestock operations, added Des Moines CCI member Cherie Mortice, 'you're throwing money at a problem that still is going to exist.”

Mark Ackelson, a former president of the Iowa Natural Heritage Foundation, told the subcommittee members that Iowa faces urgent water quality problems that must be addresses as part of a balance, comprehensive long-term plan.

'Water quality's important, but it's much more than water quality and people need to understand this,” he said. 'This is about investing in our future. It's investing in our grandkids. It's about investing in our quality of life. It's about investing in economic development.”