Don’t increase Iowa Sales Tax to fund Natural Resources and Outdoor Recreation Trust Fund

I agree with Iowa Senator Ken Rozenboom that people who voted for the Iowa Constitutional Amendment which created the Natural Resources and Outdoor Recreation Trust Fund were expressing their “feel-good” support for cleaner water and expanded recreation opportunities in Iowa.  The Register’s opinion polls also make it pretty clear that a majority of Iowans are willing to pay a higher sales tax to fund these priorities.

As a long-time river canoe paddler, I want clean waters in Iowa as much as anyone.  But raising the sales tax is the wrong approach to pay for the prevention and clean-up.  Here are three good reasons why Iowans and the Iowa Legislature should not increase the sales tax in order to fund the Trust Fund, and why the Constitutional Amendment should be repealed:

First, much if not most of the money will go to pay for subsidies or other incentives to the polluters to encourage them to stop polluting.  (Only 7% is guaranteed to go to trails.  All other categories are not guaranteed to go to recreation.)   Historically, we have required polluters to stop polluting our common environment or otherwise pay fines or other penalties to force them to stop polluting and to pay for cleanup of pollution they caused.  Taxpayers should not be bailing out polluters.  Taxpayers should especially not pay rent to farmers to temporarily “set aside” land from production in order to reduce run-off.  As we’ve seen under the federal program, if the payments stop or crop prices get too high, many farmers put fragile land right back into production.

Second, if we were to increase the sales tax,the only way to stop the spending would be to repeal the Constitutional Amendment.  Eventually, the need for tax money to pay for pollution prevention or clean-up will come to an end.  But the Constitutional Amendment has no sunset provision so money put into the Trust Fund will be required to be spent according to the fixed formula until the amendment is repealed.  We really need the flexibility of a legislative solution rather than a rigid Constitutional Amendment to solve our water pollution problem.  The Constitutional Amendment should be repealed.

Third, the sales tax is a regressive tax that is disproportionately paid by relatively poorer people.  Poorer people pay a larger percentage of their income in sales taxes than do higher income folks.

It is true that Iowa’s waterways are unacceptably polluted.   This is a problem that we need government regulation to solve.   A more just and fair way to finance the clean-up of our waters would be to put a tax on the pollutants – namely farm fertilizers and other chemicals.  All such taxes collected could be put into a clean water trust fund, which a majority of Iowans support.  There should also be appropriate fines to pay the cost of cleanup related to livestock sewage or other pollutants that are spilled into our waters.  The basic and just principle is that polluters should pay the costs of prevention and cleanup, not general taxpayers.

Regarding improving recreational opportunities, we have already made significant progress  toward providing more and better quality outdoor recreational opportunities for Iowans.  We should continue on our current incremental path that has worked well rather than significantly increasing taxes.

Don’t extend SAVE in Iowa – the school infrastructure sales tax

School districts in Iowa are lobbying hard to extend the SAVE one percent sale tax that goes to fund school infrastructure.  The current tax does not end until 2029!  Why do school districts want to extend the tax now, when they still have tax money coming in for about 11 more years?   It is because they have already spend all of their future sales tax revenues through bonding.  Many metropolitan school districts already have beautiful facilities, and several central Iowa school districts just passed school bond referendums to pay for additional new facilities.  We now need to get back to letting the individual school districts, and their own taxpayers, decide whether or not they need additional tax money.  Contact your state legislators and urge them to oppose this future tax increase.

Don’t extend school infrastructure for 21 years – to 2050!

The Iowa House of Representatives should definitely not pass HF 230 – to extend the school infrastructure sales tax for another 21 years – to 2050!

In 1998, we were told that the 1% local option tax for school infrastructure would be temporary – for 10 years.  In 2008 the temporary tax was changed from a local option to a state-wide sales tax, and was extended for another 22 years – to expire in 2029.  Even though we still have 12 years left of the tax, school districts are pressuring the legislature to extend the tax for an additional 21 years!

Why would they want to do this?  Because years ago, they borrowed against the future taxes and have already spent the taxes that will be collected during the remaining 12 years.  If the tax is extended again, you can bet that some school districts will again quickly borrow against the future taxes and spend the money decades before the taxes are collected.

Do we really need this much money for school infrastructure.  Some school districts might need the money, but it appears that many school districts are flush with money and already have excellent facilities.  We really should wait until 2029, then allow local school districts have their own local option tax if the local taxpayers believe there is still a need.

Repeal Iowa Constitutional amendment – dont’ pay farmers rent to not pollute.

Governor Brandstad said he is open to increasing the sales tax to improve water quality in Iowa. (Des Moines Register, 5/3/2016, “Branstad open to sales tax for water quality” – link below) Specifically, he wants to implement the Natural Resources and Outdoor Recreations Trust Fund. Under the Iowa Constitutional amendment passed in 2010, the next three-eights of a penny increase in the sales tax must go to the Trust Fund. He suggested offsetting the tax increase by a decrease in the income tax – to make the change revenue neutral.

We all want clean water and nice recreation opportunities. But, what I don’t want is to pay farmers rent to not pollute. It appears that up to 50% of the tax collected could go to farmers to entice them to not pollute. The Constitutional amendment was a mistake. People want clean water and good recreational opportunities, but the way the Consitutional amendment was structured was a mistake. I think most Iowans voted their emotions, but would really not agree with the structure of the amendment.  We need to repeal this amendment.

Convention Center Hotel should be private, for-profit

Today, the Des Moines Register reported that the group charged with bringing a hotel to the Iowa Events Center is suggesting that the hotel be managed by a nonprofit organization.  (See link below.)  It appears from the report that the hotel would have a separate private owner.  I don’t get it.  Wouldn’t the owner decide who would manage the hotel?  The project has already been scaled back from 450 room to 300 rooms due to project costs.  The current proposal is relying on, “a number of city, county and state incentives.”  It appear pretty clear that the private sector thinks such a hotel does not make good economic sense.  Given the vitality of the downtown Des Moines area, we need to ask when, if ever, are the taxpayer subsidies going to end for what should be private investments.

Link: http://www.desmoinesregister.com/story/money/business/development/2015/01/16/convention-hotel-update/21862043/

Don’t increase sales tax to fund recreation and conservation.

Contrary to the Des Moines Sunday Register opinion essay on 12/14/2014, Iowans did not vote four years ago to increase the Iowa sales tax by 3/8ths of a percent to fund conservation and recreation. Instead, Iowa voters made the easy choice to show emotional support for recreation and the environment without having to actually pay anything. Iowa is already doing very well on the recreational front without increasing taxes. We also already have substantial subsidies and other incentives to promote conservation and reduce pollution. If we want more funding for recreation, establish user fees. If we need to take further steps to reduce pollution, we should assess fines against the polluters. We do not need to tax ourselves $150 million per year in perpetuity. We made a mistake by amending our Constitution to commit any future sales tax increase to specific, narrowly defined purposes. We will not be able to change how we use the proceeds of any future tax increase without an amendment to our Iowa Constitution. We should not compound our mistake now by increasing our sales tax.

Link to Register opinion essay:  http://www.desmoinesregister.com/story/opinion/editorials/2014/12/13/editorial-pressure-lawmakers-outdoor-fund/20387043/