Broad coalition to push for sales tax hike targeted at water quality

Iowans would pay higher state sales taxes to finance improvements in water quality and other natural resources programs under a new lobbying initiative endorsed Monday by a group of Iowa business and conservation leaders.

Organizers said they are launching a larger and stronger Iowa’s Water and Land Legacy Coalition that will propose raising the state sales tax by three-eighths of 1 cent in the 2017 session of the Iowa Legislature, which convenes in January. The additional $180 million in state revenue would support initiatives that would include cleaning up the state's dirty rivers and streams, upgrading soil conservation, and enhancing wildlife and outdoor recreation programs.

"Clean water, healthy soils and enhanced natural spaces are not Democrat or Republican ideas, but rather vitally important pieces of Iowa that are directly tied to our economy and quality of life," said Kirk Leeds, chief executive of the Iowa Soybean Association, which is a coalition member.

He said farmers and land managers have a vested interest in conservation as they expand efforts to feed the world. At least 60 percent of the additional sales tax money would be targeted for improving Iowa's polluted waters, officials said. A program known as Iowa's Nutrient Reduction Strategy calls for reducing rural and urban nitrogen and phosphorus losses by 45 percent.

However, Republican Gov. Terry Branstad's spokesman offered no support Monday for a sales tax hike.

"Gov. Branstad is pleased to see Iowans engaged in the conversation on how to secure a long-term, reliable source of funding to address water quality," said Ben Hammes, Branstad's communications director. "However, Gov. Branstad continues to believe that we can prioritize our state budget and achieve our goal of finding this long-term reliable source of funding without raising taxes on Iowa taxpayers."

RELATED: Who should pay to improve Iowa's water quality?

Iowa's water quality problems have become the focus of a statewide debate in the wake of a federal lawsuit filed by the Des Moines Water Works Board of Trustees against drainage districts in northwest Iowa's Buena Vista, Calhoun and Sac counties. The litigation claims underground tiles act as conduits that funnel excessive nitrates into the Raccoon River, a source of drinking water for 500,000 Water Works customers. Des Moines Water Works seeks federal oversight of drainage districts and, indirectly, farmers.

The coalition announced the renewed lobbying effort at a news conference at the confluence of the Des Moines River and the Raccoon River on the edge of downtown Des Moines. The Greater Des Moines Partnership, the metro area's economic development group, is supporting the proposal, along with Iowa State Association of Counties, Iowa Environmental Council, Iowa Natural Heritage Foundation, Iowa Ducks Unlimited, and about 17 other Iowa groups.

Sixty-three percent of Iowa voters agreed in November 2010 to establish a Natural Resources and Outdoor Recreation Trust Fund to pay for such initiatives. But the fund remains empty because it requires a sales tax hike of at least three-eighths of 1 cent for dedicated, protected funding. Legislative action is needed to raise the sales tax, and many Republican legislators have said they weren't elected to increase taxes on hardworking Iowans.

However, the sales tax plan has renewed impetus after delegates representing the Iowa Farm Bureau Federation agreed last week to a resolution that calls for finding water quality financing from new or existing state revenues. It's a significant shift for the Iowa Farm Bureau, which had previously asked lawmakers to fund water quality initiatives from the state’s existing budget.

RELATED: Full coverage of Iowa's water quality issues

State Sen. Matt McCoy, D-Des Moines, endorsed the sales tax increase Monday. He said he hopes Republican lawmakers will agree to hold a bipartisan "summit" on water quality funding after November's elections.

"I think it is absolutely essential that we have a long-range, sustainable plan to deal with water quality," McCoy said. "We don't have the funds in our budget currently to address water quality to the extent that is needed."

Jeff Kaufmann, chairman of the Republican Party of Iowa, told reporters last week there is some reason for optimism that clean water issues will be addressed by the Iowa Legislature.

“I am hearing water quality now being mentioned at almost every Republican fundraising event. That’s a pretty fundamental change. That’s definitely a newsworthy development," Kaufmann said. "So I think from a Republican chair point of view ... making sure resources are there and making sure people realize that Republicans care about this issue as much as Democrats have (is important). We just haven’t been as good at articulating that. As chair of the party, I’m very excited about Republicans taking the lead on this.”

Some activists oppose raising sales taxes, saying they are a regressive tax that takes a larger percentage from lower-income people than higher-income people.

"A regressive tax is the wrong approach," said Erica Blair, a community organizer for Iowa Citizens for Community Improvement. "Big Ag should pay to clean up its mess — not Iowa taxpayers. By laying all the burden on Iowans to clean up ag’s pollution, no meaningful change will occur. This would allow the industry to continue externalizing costs onto Iowans, while operating business-as-usual with no accountability. Instead, Iowa needs mandatory regulations, not voluntary compliance."

In the 2016 Legislature's session, Branstad made improving water quality a cornerstone of his legislative agenda. The governor suggested extending a 1-cent school infrastructure sales tax, which is due to expire in 2029, and diverting a portion of the future growth of revenue to address water quality. The Republican-led House then passed its own proposal by shifting money now spent on infrastructure projects and using money Iowans already pay on metered water through their water bills. The Senate, controlled by Democrats, also discussed the issue.

But Branstad's proposal and several others failed to win final approval amid objections from educators, anti-tax groups and others.

— Reporter Brianne Pfannenstiel contributed to this story.