Branstad offers water quality compromise

URBANDALE - Gov. Terry Branstad is floating a new compromise he hopes generates state money to address water quality concerns while balancing future needs for school infrastructure and other conservation, resource protection and recreational purposes.

Branstad told members of the Westside Conservative Club he would be open to repurposing the penny sales tax for school infrastructure set to expire in 2029 by continuing the tax and splitting the ongoing proceeds with five-eighths going to education and three-eighths going into a constitutionally protected natural resources trust that Iowa voters approved in 2010.

'I throw that out as a possibility of what we could do and do it without raising taxes,” the governor said. 'I'd be willing to consider replacing it, so it's not a sales tax increase - one expires and the new one could go five-eighths for school infrastructure and three-eighths for that. Then you would meet two commitments.”

Branstad said he would back a plan that won bipartisan support in the Iowa House last session that proposed shifting $478 million over 13 years to water quality projects from a water-metering tax and the gambling-funded state infrastructure account. However, majority Senate Democrats balked at that plan fearing it would shift money from other priorities like education.

Republicans control the Iowa House by a 57-43 margin while Democrats hold the edge in the Iowa Senate with 26 members to Republicans' 23. Ocheyedan Sen. David Johnson has declared himself an independent with no party affiliation after ending his GOP membership.

The future of water quality and a number of other state issues could be decided based on the outcome of a November election in which the balance of power at the Statehouse could shift.

At the start of the 2016 session, Branstad unveiled a plan to divert to water quality programs some future revenue from the local-option sales tax devoted to school infrastructure projects. According to his office's estimates, the plan would have generated $4.7 billion over 32 years for water quality programs.

But legislators of both political parties were cool to the proposal, since it dipped into a funding stream approved by voters for education.

Johnson, who is midway in a four-year Senate term, said the state faces major demands on the education and environmental fronts that need to be addressed next session.

'If we don't make the environment the No. 1 issue this session, it will be a failed session. I consider last session a failure because we didn't take up anything substantial to deal with water quality and the issue just gets worse and worse,” Johnson said in an interview Tuesday.

'We've got to make some major moves and that means funding. There's going to be a tax increase somewhere this next session. I really believe it,” added Johnson, who tried unsuccessfully last session to gain support for a 'revenue-neutral” plan to incrementally raise the sales tax from 6 percent to 6.375 percent over three years for the natural resource trust fund while offsetting it with corresponding phased adjustments to the Iowa income tax filing thresholds.

On Wednesday, Branstad flatly rejected raising taxes to fund water quality needs.

'I'm willing to look at options,” the governor said in an interview, 'but not something that raises taxes.”