Iowa sales tax hike for outdoors advances, but faces uphill battle

More than four years after Iowa voters overwhelmingly approved a state constitutional amendment to establish the Iowa Natural Resources and Outdoor Recreation Trust Fund, lawmakers haven't provided it with a dime of tax revenue.

A plan to raise an extra $150 million annually for the fund cleared an Iowa Senate panel Tuesday, but it faces a tough road ahead in winning full legislative approval.

A Capitol hearing room was packed with members of advocacy groups supporting Senate File 357. The measure would increase the state's sales tax — now 6 percent — by three-eighths of 1 percent. All of the additional money would go to the Iowa Natural Resources and Outdoor Recreation Trust Fund.

Sixty-three percent of Iowa voters in November 2010 supported a state constitutional amendment to create the trust fund with the goal of protecting and enhancing water quality and natural areas in the state, including parks and trails, fish and wildlife habitat, and conserving agricultural soils. However, legislators have repeatedly declined since then to raise taxes to generate money for the fund.

Outdoor advocates hope this year will be different. But Sen. Joe Bolkcom, D-Iowa City, chairman of the tax-writing Senate Ways and Means Committee, said Tuesday it will be a challenge securing enough votes in the House and Senate to win approval for a state sales tax increase.

"I am hopeful that legislators will listen to their folks back home because this bill has broad and deep support among Iowans to make this investment," Bolkcom said.

However, state Rep. Tom Sands, R-Wappello, chairman of the House Ways and Means Committee, said it's "very doubtful" the bill could be approved in the House in its present form.

"It would be extremely difficult for House Republicans to vote to raise fuel taxes and sales taxes in the same year. Our focus in our campaigns has always been to try to lower taxes for all Iowans," Sands said.

Many House members do support the concept of the trust fund to improve water quality in Iowa, Sands added. But if money is ever provided for the trust fund, lawmakers will want to ensure it is spent appropriately to get the biggest return for investment, he said. In addition, the issue can't simply be about asking Iowans for more money. A sales tax increase would have to be coupled with an income tax cut to lower taxes elsewhere, he said.

Gov. Terry Branstad, a Republican, has not endorsed the sales tax increase for the trust fund. Jimmy Centers, Branstad's spokesman, said the governor has proposed spending $57 million for water quality in his biennial budget and has called for an innovative quality-of-life plan, IowaNEXT, to offer a holistic approach to the state's efforts to improve parks, lakes, trails and museums.

Iowans for Tax Relief, which lobbies for reduced government spending and lower taxes, has officially declared its opposition to the Senate proposal.

A Senate subcommittee voted 3-0 Tuesday to advance the bill to the Senate Ways and Means Committee. The panel was chaired by Sen. David Johnson, R-Ocheyedan, who was joined by Bolkcom and Sen. Dick Dearden, D-Des Moines.

"This has my full support," Johnson said, adding he is urging fellow legislators to respond favorably in a bipartisan manner. While lawmakers have already approved a 10-cent per gallon gas tax increase this session to pay for road improvements, they should also agree to provide more money for natural resources and outdoor programs, he said. Setting the issue aside until 2016 would be a mistake because many lawmakers don't want to vote for a tax increase in an election year, he said.

The subcommittee heard from 11 speakers, representing a wide range of outdoor groups, who unanimously favored the sales tax increase. Several speakers cited the benefits to future generations of Iowans to preserve water quality and natural resources.

"The bottom line why I am here is that I want to leave a legacy to my grandkids and my great-grandkids," said Randy Munson, state chair for Iowa Ducks Unlimited.

The Iowa Association of County Conservation Boards provided a thick document with hundreds of projects that could be accomplished in Iowa's 99 counties to enhance the outdoors. These ranged from constructing a 12-mile bicycle trail around Lake Icaria and into the town of Corning in Adams County, to replacing a restroom on the east lakeshore access of Lake Cornelia Park in Wright County.

In Polk County, the Central Iowa Trails System is growing fast, but not as fast as demand from the largely urban population, officials said. In addition, there are thousands of acres of habitat being overrun by invasive species.

Randy Taylor, president of the Iowa Conservation Alliance, said that protecting the outdoors is important to Iowans' quality of life and helps the state attract and retain young people.

"We all want good jobs and education, but at the same time we want clean water and plenty of recreational opportunities," Taylor said.

Other speakers said the additional money will help advance the state's voluntary nutrient reduction strategy, which is aimed at improving water quality through an expansion of farm conservation practices.