Clean water investment would create $691M economic impact

The governor's $4.7 billion proposal to improve Iowa's water quality over three decades would generate $691 million in economic activity and create 2,800 jobs annually, according to an Iowa State University report released Tuesday.

Gov. Terry Branstad proposes extending a tax that supports Iowa school facilities and diverting part of the tax revenue growth to efforts to cut the amount of nitrogen and phosphorus entering Iowa's rivers, lakes and streams.

The "proposal would mean more jobs for Iowa families, as well as dedicated funding for cleaner water," Branstad said in a statement.

Iowa CCI Action Fund and other environmental groups said the governor's plan fails to hold agriculture accountable for nutrient runoff.

"He's approaching this as if it is a public works project … with no mention of public health, no mention of environmental protection, no mention of the recreational benefits of clean water," said Bill Stowe, CEO of the Des Moines Water Works, the utility suing drainage districts in northwest Iowa over high nitrate levels.

"The governor wants to provide a huge amount of resources through a state sales tax, without producer or ag accountability, without metrics, and without specific enforceable timelines," Stowe said.

The Des Moines utility filed a federal lawsuit a year ago against drainage districts in Sac, Calhoun and Buena Vista counties, alleging that underground field tiles act as conduits that funnel high levels of nitrates from farm fields into the Raccoon River, one of two sources of drinking water for 500,000 central Iowa residents.

The utility seeks federal oversight of Iowa’s drainage districts and, indirectly, farmers, asking that they be regulated like factories, businesses and cities.

The lawsuit has added pressure to implement the Iowa Nutrient Reduction Strategy, a plan designed to cut nitrogen and phosphorus levels by 45 percent from rural and urban sources. The nutrients contribute to the dead zone in the Gulf of Mexico, an area unable to support marine life each summer.

Kirk Leeds, CEO of the Iowa Soybean Association, said it's important that water quality improvements provide economic benefits, as well as environmental benefits, to gain broad support.

"Show me the economic value, show me the improvements for the environment, for our families, for future generations," Leeds said.

The report, written by ISU economists Dermot Hayes, Cathy Kling and John Lawrence, said the governor's proposal would generate $170.5 million annually to finance water quality efforts. The annualized amount levels out revenue that's projected to grow from $7.4 million the first year to $347 million the last year.

Water quality improvement costs, however, would range from $407 million to $712 million annually, based on two possible scenarios that include using cover crops, and building wetlands and bioreactors on millions of acres.

The state investment falls significantly short of the costs, the report said, even with the same annual level of federal government support — $34 million — provided last year for conservation practices.

Farmers, landowners or other "beneficiaries outside Iowa will be needed to fill the gap," the report says.

The federal government could justify stepping up its investment with the report's estimate that downstream states would see $484 million annually in benefits from Iowa's efforts.

The report also said Iowans would see $135 million to $203 million annually in environmental, health and other benefits.

It didn't include other proposals to finance water-quality improvements, but lawmakers are considering several.

For example, some farm and environmental groups also support a proposal to raise the sales tax three-eighths of 1 percent, a measure that would generate $150 million to $180 million annually for natural resources and outdoor recreation programs. Part of that money also could be used to address water quality issues.