Gov. Kim Reynolds’ proposal to raise Iowa’s sales tax to pay for water quality efforts and cut income and property taxes would mean less money for the environment than Iowans expected and could come at a cost to education and other state programs, according to the left-leaning Iowa Policy Project.
Using the formula established in 2010, there should be $200 million a year available for watershed protection, trails, lake and stream restoration and public land buys, among other efforts, the Policy Project reported.
“What we get is about $82 million in new money, distributed very differently than we expected instead of more than $200 million more we should have gotten if this law implemented the constitution amendment as it was understood by voters,” said Peter Fisher, research director for the Iowa Policy Project. “The bottom line is we’re raising the sales tax and using most of that for income tax relief.”
Reynolds unveiled the Invest in Iowa Act last month and now is speaking about it across the state. Senate Study Bill 3116 was introduced Feb. 5 and, as an appropriations bill, is expected to get more attention later in the session.
But opponents of Reynolds’ plan aren’t waiting to attack it.
The Iowa Policy Project reports Reynolds is shrinking the amount of money available for environmental efforts by proposing to raise both the sales tax and use tax, but then using only the sales tax increase for IWILL. Her plan also excludes sales tax on digital goods and services.
“The result is $31 million less going into the voter-created Natural Resources and Outdoor Recreation Trust Fund,” the report stated.
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The governor would change the formula established in 2010 to allocate less money to trails and the Resources Enhancement and Protection fund — programs managed by the Iowa Department of Natural Resources — and give more money to the Iowa Department of Agriculture and Land Stewardship to pay for voluntary conservation strategies meant to improve water quality, the Policy Project reported.
“There’s not much to claim this voluntary program is working very well,” said David Osterberg, project co-founder and lead environmental researcher, who also served as an Iowa House Democrat.
Iowa officials estimate phosphorus going into Iowa rivers and lakes went down 18.5 percent between 1986-1990 and 2006-2010, while nitrate loads went up 5.3 percent during the same period. These nutrients, when washed into the Mississippi River, are harmful to fish and other wildlife in the Gulf of Mexico.
Iowa’s estimates use models based on implemented conservation, such as acres of cover crops, and don’t always reflect the actual nitrate and phosphorus in the rivers and lakes.
Reynolds said she has “no interest in raising taxes,” which is why her proposal would reduce income taxes with some of the money raised with a penny sales tax increase. She also would put some “old” money into the proposal by moving the REAP funding into the new package, the Policy Project reported.
If there’s no additional taxes in Reynolds’ proposal, but more money is going to environmental needs, that must mean budget cuts elsewhere, Osterberg said, giving education funding as an example.
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