State Lawmakers Won't Advance Bill Raising Taxes On State's Hard-Hit Private Forests

State lawmakers say they won’t advance a bill that would have rolled back a tax exemption for privately-owned forest reserves, though concerns persist that some landowners are taking advantage of the century-old program.

Chair of the Ways and Means Committee, Sen. Dan Dawson, R-Council Bluffs, said during a subcommittee meeting Monday that he doesn’t want to move the bill forward at this point but had called the meeting in order to gather public input on the issue.

Similar proposals have been introduced in past years, with proponents arguing that the tax exemption unfairly burdens other landowners and that certain bad actors are reaping the tax benefits without adequately protecting their woodlands, and avoiding enforcement.

Critics argued that advancing the measure in the wake of last August’s devastating derecho would be a ‘kick in the teeth’ to those managing the state’s private forests.

The bill would cut into a tax exemption program for privately managed forests which was first implemented in 1906. Currently, those with at least two continuous acres of woodland that meets certain tree density requirements can qualify for a 100 percent property tax exemption.

SF 352 would reduce that benefit to a 75 percent exemption on parcels of 10 acres or more, for a period of five years.

Sen. Joe Bolkcom, D-Iowa City, said the proposal would make it even harder to restore Iowa’s forests, a quarter of which were lost after the powerful windstorm.

“This bill is a GOP derecho: it’s going to try and take care of the rest of the trees that weren’t damaged,” Bolkcom said. “I cannot for the life of me understand why we’re raising property taxes on the private managers of Iowa’s woodlands and forests after what they endured this last summer with the derecho.”

Jon Zakrasek of Cedar Rapids told lawmakers he would be one of the landowners directly affected by the proposal. He owns three acres of forest that are currently enrolled in the forest reserve program but wouldn’t qualify under the changes. He argued that levying a tax increase on top of the cost to restore his land after the storm would add insult to injury.

“We lost 80 percent of our trees. They were massive, most of them 80 feet tall and 24 inches or more in diameter. And I had an estimate to clean up the property and just replant: $70,000,” Zakrasek said. “So here I am, down on the ground, suffering from the derecho and then you kick me in the teeth with a tax increase that kicks in at 100 percent of the valuation of the land, effective January 1, 2022.”

“I would expect to get some help instead of an additional tax burden,” he added.

Supporters of the program argue the tax breaks support critical private conservation efforts that provide habitat, trap carbon and filter water. Roughly 3 percent of Iowa’s overall landmass is publicly held, placing much of the burden of environmental protection on private landowners. According to a fact sheet from the Iowa Department of Natural Resources, 90 percent of Iowa’s forests are controlled by private landowners.

“There is great value to having private forests and woodlands in Iowa, including the wildlife habitat, the biodiversity that come from the various species of wildlife that live in those forests, clean air, clean water, protecting our soils,” said Pam Mackey-Taylor of the Iowa Chapter of the Sierra Club. “What we should be doing after the derecho, the oak wilt, problems with the emerald ash borer, is increasing our forests.”

“That means the incentives need to be right,” she added. “Increasing the property taxes on woodlands goes in the wrong direction.”