Policy Group Argues For Tax Increases To Expand Water Quality Programs
Iowa is spending a fraction of what should be budgeted toward improving water quality, according to an analysis by the nonprofit Iowa Policy Project. The group argues state lawmakers should raise taxes in order to put more money toward solutions, but that doesn’t appear to be under consideration just yet.
Including federal funding, $512 million was spent in Iowa on water related projects in 2018. Most of that was in the form of federal Conservation Reserve Program (CRP) payments to farmers for taking highly erodible land out of production. The state’s share of that total was relatively small, about $42 million, although that same year the legislature passed a bill putting $282 million over 12 years toward the state’s Nutrient Reduction Strategy.
“So finally with the new money, yes, it will increase again,” said David Osterberg, who co-wrote the analysis. “But that’s very little compared to what we need.”
Osterberg cited estimates from Iowa State University and the Iowa Soybean Association that suggest spending may need to top $1 billion per year in order to significantly reduce the levels of nitrogen and phosphorous carried in Iowa waterways. The question is where that money should come from.
Iowa Policy Project suggests raising revenue by cancelling the sales tax exemption for farmers on fertilizer purchases or by increasing the general state sales tax. “If you could do something like that you could start making a commitment, and we are not,” said Osterberg.
Iowa Soybean Association CEO Kirk Leeds agrees the state should spend more to reduce nutrient pollution, but said raising taxes on farmers takes away money that could be spent on conservation.
“In order to really address Iowa’s water quality issues it’s going to take investments by farmers but downstream folks as well,” Leeds said. “A tax on fertilizer is not going to come anywhere close to what it’s going to take to address this problem. That’s why we’ve argued for a general sales tax.”
Neither idea is up for debate this year but Leeds does expect a general sales tax package, with a portion going toward water quality, to be part of a debate over state tax reform in 2020.