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should not increase the sales tax in order to fund the Trust Fund, and why the Constitutional Amendment should be repealed: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so money put into the Trust Fund will be required to be spent according to the fixed formula until the amendment is repealed.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  The Constitutional Amendment should be repealed.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.

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.