Staff Columnist

Reynolds is 'interested' in a trust fund tax deal

Gov. Kim Reynolds answers a question as she meets with The Gazette's Editorial Board at The Gazette in Cedar Rapids on Wednesday, Jan. 30, 2019. (Stephen Mally/The Gazette)
Gov. Kim Reynolds answers a question as she meets with The Gazette's Editorial Board at The Gazette in Cedar Rapids on Wednesday, Jan. 30, 2019. (Stephen Mally/The Gazette)

Gov. Kim Reynolds says all’s “quiet” on the water quality front so far this legislative session. But maybe that’s because all the action is happening behind the scenes.

Reynolds told The Gazette’s editorial board this past week there are lawmakers interested in raising the state sales tax by a penny, with the first three-eighths of that cent going to fill the Natural Resources and Outdoor Recreation Trust Fund created by voters in 2010. The other five-eighths could be used to pay for mental health programs currently funded by local property taxes. Property tax relief is a priority for the Republican-controlled Legislature.

And not just lawmakers are interested.

“I know there’s some interest by some legislators, I said I would be interested in it,” said Reynolds, who added she hasn’t been in on discussions and hasn’t seen details of the proposal.

“Those discussions continue to happen. I don’t know where they’ll go this year. I can’t get a good sense of that right now,” Reynolds said. “Not opposed to it. I’m willing to be part of the conversation. But that may be something we really focus on in the interim if it doesn’t get done this year.”

I, too, have heard rumors of grand bargains being cooked up on the sales tax front. But this is the first time I’ve heard the governor suggest she’s interested, bordering on supportive.

It’s true, our Golden Dome of Wisdom is the state’s leading producer of trial balloons, as well as darts. Maybe this is a balloon that can catch a surprisingly strong updraft, but Republican legislatures usually aren’t all that into tax increases.

It could simply be that something’s got to give. It’s been more than eight years since Iowa voters approved a constitutional amendment creating the trust fund. It’s been sitting empty ever since as skittish lawmakers and governors ducked the notion of a tax increase to fill it. The three-eighths cent would raise upward of $180 million for water quality, conservation and outdoor recreation.

ARTICLE CONTINUES BELOW ADVERTISEMENT

The amendment passed with 63 percent of the vote. Filling the fund is a popular idea, according to polls. Maybe 2019 is the year opposition finally breaks.

That could be good news for those of us who want a stable, dedicated and sizable source of funding for measures keeping fertilizer-laden runoff from rushing into waterways. It’s the sort of funding stream that could make a difference.

I say “could” because we don’t know the details. Devils, there within.

One big detail is the funding formula, also known as the statute that spells out how trust fund dollars would be spent. The one currently on the books was created by a large group of environmental, agricultural and conservation stakeholders more than a decade ago. It was approved by lawmakers, which means the Legislature can change it.

If lawmakers move toward a sales tax increase, there will be calls to change the formula and put more dollars into farm-based water quality projects and much less, or nothing, into trails, parks and other outdoor recreation uses.

The Iowa Farm Bureau will be at the center of a formula debate. It hasn’t been supportive of the fund or the push to fill it, but if it’s going to happen, the Farm Bureau wants the bucks to go to farmers and conservation practices advocated through the state’s Nutrient Reduction Strategy. Voters who liked the “outdoor recreation” part of the trust fund title, be damned.

In fact, one of the Farm Bureau’s 2019 legislative priorities is to oppose expansion of state parks, ostensibly out of a deep concern that the state can’t afford upkeep on the parks it has.

The Farm Bureau also wants property tax relief. So you see how the grand bargain may take shape. A large, balanced group of environmental, conservation and agriculture stakeholders may not be at the table this time in a GOP Legislature not exactly famous for transparency and consensus-building.

Reynolds says changing the formula might be necessary.

“I just think all of that stuff needs to be on the table. That’s part of compromise and negotiation,” the governor said.

ARTICLE CONTINUES BELOW ADVERTISEMENT

So the good news could be that the trust fund, at long last, is filled. The bad news may be that those dollars will go into a formula cooked up behind closed doors by the Farm Bureau and its allies. Then they’ll be spent on existing programs still lacking meaningful bench marks, timelines or robust public data reporting to measure success.

The formula is not untouchable. Changes might make sense. But any alterations should be subject to a broad, public discussion.

Voters approved a fund in 2010 pitched to them as a source of dollars for outdoor recreation, wildlife habitat improvements and trails, as well as water quality. Outdoor recreation also doubles as rural economic development. Breaking faith with those Iowans to please powerful interests would be a mistake. A bargain, to be sure, but hardly grand.

• Comments: (319) 398-8262; todd.dorman@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.