Lawmakers open to discussing sales tax increase for water quality initiatives

Gov. Kim Reynolds signs SF512 on water quality into law, the first measure she signed as governor in January 2018. (CBS2/FOX28)

Environmental, agriculture and business groups that have long backed a sales tax increase to fund water quality and outdoor recreation projects hope the measure will pass in 2019, after lawmakers in the GOP-controlled statehouse signaled they'd be open to discussing it.

“It creates a long term, sustainable funding source we need to address our natural resources and outdoor recreation in Iowa," said Kristin Aschenbrenner, Iowa director for The Nature Conservancy. "It would have huge impact."

The Nature Conservancy is part of Iowa's Water and Land Legacy, a broad coalition of business, conservation and agriculture groups and local leaders that have been pushing for a three-eighths of a cent sales tax increase to fund a state trust to protect Iowa's natural resources and outdoor recreation. The sales tax increase could bring in $187 million in revenue.

Iowa voters approved the Natural Resources and Outdoor Recreation Trust Fund during a statewide referendum in 2010, giving the OK to a constitutional amendment establishing the trust fund. But lawmakers have yet to approve a sales tax increase to put money into it.

That could change in 2019, Republican leaders indicated at a legislative forum Monday. They said they'd be open to a discussion about the increase.

“Until now, nobody has been willing to fund it. That’s been Republicans [and] Democrats—nobody has been willing to fund it. So we need to look at what we can do in the meantime," said Rep. John Wills, R-Spirit Lake, who shepherded the water quality bill that passed in 2018.

"But do we look at that fund? Yes that’s definitely something we should take a look at," he said, echoing the GOP leaders at the forum.

Aschenbrenner points to polling showing growing support for the sales tax increase in the decade since it's been discussed.

“We’ve done enough polling over the years to see the upward trend of Iowans support of this. It’s very popular among Iowans," she said. A 2017 poll shows 69% of Iowa voters support the sales tax hike of less than a penny.

She also says putting money in the fund would grow Iowa's economy, and in turn, boost sales tax receipts and ultimately grow the amount of money pouring into the fund each year.

“The thing we know about investing in natural resources and outdoor recreation is that facilitates economic growth," Aschenbrenner said.

While lawmakers in the GOP-controlled state capitol say they are open to the tax increase to fund these water quality and outdoor recreation initiatives, they are traditionally an anti-tax caucus, which could make it an uphill battle.

“I don’t think we can pass a straight up tax increase," Wills said. "I think it would have to be paired with a tax reform of some sort in order for it to even have a chance.”


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