Staff Columnist

Gov. Kim Reynolds' trust fund fill is good news, with flaws

Iowa Gov. Kim Reynolds delivers her Condition of the State address at the Iowa Statehouse in Des Moines, Iowa, on Tuesda
Iowa Gov. Kim Reynolds delivers her Condition of the State address at the Iowa Statehouse in Des Moines, Iowa, on Tuesday, Jan. 14, 2020. (Jim Slosiarek/The Gazette)

So after nearly a decade of waiting, an Iowa governor has rolled out a plan for, finally, filling the Natural Resources and Outdoor Recreation Trust Fund.

Note a lack of exclamation points.

That’s because this dose of otherwise great news has problems.

In her Condition of the State speech, Gov. Kim Reynolds proposed raising the state sales tax by one cent, with three-eighths, or about $152 million annually, flowing into the trust fund. Iowans who voted overwhelmingly to create the constitutionally protected fund in 2010 have been waiting for a leader to step up and make this happen.

But she changes the formula for how the money would be spent, providing less money for parks and natural resources programs administrated by the Department of Natural Resources while transferring more bucks to farm-based voluntary water quality programs administrated by the Department of Agriculture. That larger pie piece for ag is likely to be spent on the same programs created by SF 512 in 2018, a bill universally panned by groups who care about water for its lack of accountability and requirements for demonstrating that funded projects are actually cleaning up water.

There’s less money for REAP, less for local conservation partnerships and less for trails, but there’s more for lake restoration.

As formula rewrites go, it could have been worse. Money is shifted around, but the categories present in the original formula remain intact. It boosts funding for water quality efforts aimed at reducing fertilizer runoff, but pours it into voluntary programs that have yet to prove they can make meaningful progress.

And this revised formula was not crafted by the same broad group of stakeholders that collaborated on the original plan, through an open and transparent process.

Reynolds uses the other five-eighths of the sales tax penny to cover the cost of a 10 percent cut in personal income taxes, and she hopes to increase state funding for county mental health services, leading to a property tax cut.

ARTICLE CONTINUES BELOW ADVERTISEMENT

It’s less than two years since Reynolds signed the largest tax cut in Iowa history, slicing corporate and individual income taxes by more than $2 billion over six years while applying the sales tax to new goods and services. Now she’s proposing to raise the sales tax, an increase that hits low-income Iowans hardest, to pay for tax cuts that surely will benefit wealthier Iowans more. This likely will be a deal-breaker for a lot of Democrats.

Reynolds said some low-income earners would see their income taxes cut 25 percent, but we haven’t seen numbers on how that compares to their share of a higher sales tax.

But these are Republicans running the Golden Dome of Wisdom, presented by the Iowa Farm Bureau, so we knew there would be tax cuts, and that the formula would get more farmy.

Still, is turning on the trust fund faucet a big enough deal to accept a flawed plan? Maybe. Many details have yet to be shared.

But Reynolds and lawmakers now need to hear from Iowans, early and often. This can’t continue to be a backroom process where we can only guess who is at the table. Let us in. It’s our money and our natural resources.

And if that doesn’t happen, ready the exclamation points.

(319) 398-8262; editorial@thegazette.com

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.

Give us feedback

We value your trust and work hard to provide fair, accurate coverage. If you have found an error or omission in our reporting, tell us here.

Or if you have a story idea we should look into? Tell us here.