Iowa Ideas 2019
October 3 - 4 | Cedar Rapids

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Farmland, funding and political will

Eight years ago, Iowa decided on a conservation payment strategy. Whatever happened to it?

    Dick Sloan walks between rows of corn where cover crops grow in Rowley. Photographed on Monday, Oct. 29, 2018. Fields planted with later-season corn can be planted by aerial seeding, allowing the cover crops to begin growing while the corn matures. (Liz Martin/The Gazette)
    Agriculture
    Dec 17, 2018 at 5:19 pm

    On a sunny, breezy morning on his farm in October, the fields on Richard Sloan’s farm are covered in cut cornstalks and leftover soybean shells. In a few weeks, the yellows and grays will be covered in green./p>

    Sloan, a farmer who runs an 800-acre row crop operation near Rowley in Buchanan County, has implemented almost every water quality and conservation measure used by farmers today — from thick grassy buffer strips separating his crops from nearby streams to wild prairie areas that attract wild animals looking for a habitat.

     

    Sloan, the president of the Lime Creek Watershed Improvement Association, believes agriculture and wildlife can coexist on the tens of thousands of farms that dot Iowa’s landscape using expanded conservation funding, even as the agriculture economy faces one of its worst downturns since the 1980s farm crisis.

    “It seems wrong to me that we come in and destroy all this habitat everywhere and the creatures that lived here are driven away,” he said. “You don’t have to be a bleeding heart about it, but still at the same time, why take that away from future generations’ experience of what Iowa can be? What’s natural about that?”

    Eight years ago, it seemed like the majority of the state agreed with him.

    In 2010, 63 percent of the voters of Iowa endorsed creating a trust fund that would pay for a wide swath of environmental projects designed to clean polluted waterways, improve the state’s parks and preserves, and protect farmland from erosion. They believed it was such a good idea that they agreed the fund, known as the Natural Resources and Outdoor Recreation Trust Fund, should be enshrined in the state Constitution with up to $180 million annually from a future sales tax increase in permanent funding.

    But in the eight years since, not a single penny has come in or out of the fund, as efforts to raise the state sales tax have stalled.

    In the years since, Iowa’s waterways have continued to grow more polluted and increasingly contribute to the hypoxia zone in the Gulf of Mexico, where nitrogen runoff from farms in the Midwest grows algae blooms that consume oxygen that other aquatic plants and animals need to survive. An April study from the University of Iowa says the annual rate of nitrates from Iowa has been above a baseline 2003 level for the past 10 years.

    That same study also estimates from 1999 to 2016, Iowa was responsible for, on average, 45 percent of all the nitrogen that flows into rivers in the Upper Mississippi River Basin and 55 percent of the nitrogen flowing into the Missouri River Basin. That eventually makes its way into the Mississippi and into the hypoxia zone in the Gulf — raising questions as to how effective the state’s current nitrogen reduction strategies are today.

    Iowa farmers also have put more susceptible land to work over the past several years, partially in response to demand for ethanol and biodiesel created by the Renewable Fuel Standard. According to a September 2018 inventory from the National Resources Conservation Service, a branch of the U.S. Department of Agriculture, Iowa’s participation in the Conservation Reserve Program is estimated to have fallen from just over 123,000 acres of prime farmland in 2007 to just over 43,500 acres in 2015, the latest figures it reported. The Conservation Reserve Program pays farm owners rent on highly erodible farmland to take it out of production and to install protective measures on for the soil.

    Since that 2010 vote, the state has endorsed a voluntary set of guidelines to control how much farm fertilizer seeps into waterways, and the Republican-led Legislature passed Senate File 512 earlier this year, which earmarks $256 million over 12 years for projects.

    Democrats and environmental groups have derided the effort as too small in scope to quell what some estimate is a far more expensive problem, and support for the fund doesn’t seem to have waned over the years. In a February Des Moines Register/Mediacom poll asking Iowans about a sales tax increase, 67 percent said they’d favor an increase to the sales tax to fund the trust fund and to improve the state’s mental health system. The resources’ trust fund automatically would get a three-eighths of a penny from any new sales tax passed due to its position in the state Constitution.

    So, years after voters gave their blessing to the fund, why have lawmakers ignored it?

    First, some history

    In 2006, the state Legislature set up a committee — with representatives from agricultural groups, hunters, conservationists and state officials — to develop a way for the state to generate sustainable funding for natural resource protection. The ballot language, crafted with help from the state’s Legislative Services Agency, was written to reflect Iowa Code that gives voters the power to amend the state Constitution, but leaving the authority to levy taxes to lawmakers.

    In early 2010, state legislators passed the bill that later would form the ballot language, 82-14, in the House and 49-1 in the Senate. Months later, voters gave their blessing to the initiative.

     

    Linda Kinman, a lobbyist for the Iowa Association of Water Agencies, was a board member of the Iowa Environmental Council on election night 2010. She said the board was “enthused” about the possibility that the state could put more resources toward water quality projects in general, and later felt disappointment with legislators who argued against the sales tax.

    “It wasn’t just the environmental groups. The people of Iowa made a pretty strong statement in support of it,” she said.

    Statehouse efforts to raise the sales tax have stalled since then.

    Three years later, state leaders endorsed the Nutrient Reduction Strategy, the framework to prevent fertilizer runoff getting into waterways across the state.

    If Iowa wants to hit the strategy’s goal of reducing fertilizer runoff by 45 percent, the strategy estimates an upfront investment would range between $1.2 billion to $4 billion, and between $77 million to $1.2 billion per year in operating costs.

    Vague language

    Several lawmakers have made the argument that the 2010 ballot measure only asked voters whether they wanted to establish the trust fund account but not if they actually wanted the sales tax hike to go along with it.

    State Sen. Ken Rozenboom, Republican from Oskaloosa, wrote in a guest opinion column in the Des Moines Register in February that the language on the ballot didn’t specifically mention a tax increase; the language was posted in full in polling places but not in the voting booths.

    Rozenboom, also chairman of the Senate Natural Resources and Environment Committee, also had a problem with the language’s lack of specific projects, writing the fund would become a “slush fund” for vague projects and land acquisition.

    In an interview with The Gazette, Rozenboom doubled down on his slush fund prediction, saying the ballot language doesn’t specify enough detail on what funds can be used for and would allow for “creative” uses.

    Rozenboom said he and his fellow Republicans would consider a move to increase the sales tax if it’s offset by a tax cut somewhere else, possibly within another round of tax cuts in the future and as an addendum to the funds earmarked in Senate File 512. But he doesn’t think it would be seriously considered if Republicans hold the state government trifecta — the House, Senate and governor’s office.

    “I think given the current makeup of the Iowa Legislature and the governor’s office, I really don’t think it’s going to happen,” he said in the week before the November midterm election. “But if Fred Hubbell becomes governor, or the Iowa Senate or the Iowa House flips to Democrats, I don’t think there’s any question we wouldn’t have the conversation.”

    Incumbent Republicans could be wary of any new water quality bills in upcoming sessions after they spent several weeks of the 2018 session passing Senate File 512, a bill authorizing the spending of $23.5 million over the next 12 years on water quality efforts by earmarking revenue from an existing metered water tax.

    Gov. Kim Reynolds, who asked for the bill to be the first she signed once she took office, hailed it as a legislative accomplishment and a good first step toward cleaning the state’s waterways. Perhaps more important is a clause in the law that immediately repeals the tax reallocation if the state sales tax increases. In other words, legislators who voted for Senate File 512 would have to sacrifice that legislative win if they want to fund the trust fund.

    Most people recognize that we're a community, that we can't do these things alone.

    - Dick Sloan

     

     

    The latest attempt to increase the sales tax came from David Johnson, a state senator from Ocheyedan, who was a member of the Republican caucus during the trust fund bill’s time in the Legislature. He since has become an independent.

    Johnson said he heard other Republican legislators say they didn’t think voters would vote for the fund, so they decided to advance the ballot initiative to avoid appearing to be against protecting natural resources or expanding state parks. They weren’t elected to raise taxes, he recalls them saying, contending that was the real reason they shied away from following through on the tax hike.

    As Senate File 512 was making its way through the Senate earlier this year, Johnson introduced an amendment to strike the entire bill and replace it with language to install the tax. It failed 34 to 16, with some Republicans and Democrats crossing party lines to vote yes and no, respectively.

    All four Republicans who voted for the trust fund ballot initiative in 2010 voted against the tax increase this year. State Sen. Jeff Danielson, the only Democratic yes vote in 2010, voted no this time.

    Johnson also accused the Iowa Farm Bureau of misleading legislators to prevent sales tax increase efforts from moving forward, saying the group argued to legislators that voters didn’t know a tax increase was connected to the trust fund amendment and that the Iowa Department of Natural Resources, the state agency that administers the trust fund, would use tax proceeds to buy out farmland for conservation purposes.

    “They were twisting the truth, and Republicans, particularly in the House, were afraid of that,” he said. The Iowa Farm Bureau did not respond to requests for comment.

    Johnson, who will retire at year’s end, questions what happened between 2010, when support for the fund was high, and today, when legislative efforts to raise the sales tax for the fund are slim.

    “I’ve heard so many different things, like the people of Iowa wouldn’t approve it, or the allocation is wrong, but where were these naysayers when it passed the Senate?” he asked.

    The fight over a penny

    Today, Iowa’s base sales tax for the majority of products is 6 cents per dollar, more than other Midwestern states like Wisconsin and North Dakota, but lower than Missouri, South Dakota, Illinois and Minnesota.

    Not all state Republicans have outright refused to consider a tax increase. Earlier this year, state Rep. Louie Zumbach, Republican from Coggon, pitched a 1 percent increase to the sales tax as part of the larger tax cut effort this legislative session, supported by 12 other Republicans.

    Under Zumbach’s proposal, the $480 million in estimated additional annual revenue would fill the $180 million limit for the resource trust fund, with another $180 million for funding mental health services and the remaining $120 million to offset revenue losses by cutting other forms of taxes.

    The bill was never heard in committee.

    For now, a future in limbo

    For now at least, it does not appear there is enough political will to ask for a sales tax hike, and the resources fund will continue to operate in name only while various factions continue a bitter dispute over how much the state should spend to protect its water and its land, and who should pay for it.

    But Johnson and the Iowa Association of Waterways’ Kinman both believe the trust fund isn’t a completely polarized issue, and a cross-party coalition can get a tax increase to the governor’s desk if enough supporters of the fund are elected.

    “It doesn’t matter if they’re a Democrat or a Republican, we just need more people in the Legislature that are concerned about looking at the state as a whole and how our resources will sustain us long term,” Kinman said. As he drove between fields in his pickup, Sloan, the Buchanan County farmer, said he understands why legislators don’t want to take the political risk of asking for a sales tax increase — particularly in a highly polarized time in American politics.

    As a solar-powered flowerpot toy — with a flower and bees — danced on the dashboard of his truck, Sloan said the state’s water quality woes have to be tackled collectively, not just by a handful of activists trying to stop nitrogen discharge.

    “Most people recognize that we’re a community, that we can’t do these things alone,” he said. “I can do an excessive amount of stuff on my farm, but it’s 800 acres out of how many thousands?”

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