A new plan being proposed in the Iowa Legislature would provide $464 million in funding over the next 13 years for water quality improvement projects in the state. The money would come from a state infrastructure fund and tax revenue from Iowans’ water bills. At his weekly press conference earlier this week, Iowa Gov. Terry Branstad said he plans to back the proposed legislation, which was introduced in an April 4 House subcommittee meeting.
“We are very encouraged about the progress being made and the approach being taken, to provide more state funding for cost-sharing with farmers and landowners to improve and protect water quality,” said Branstad. “We think this newly proposed plan is sustainable and will provide the funding that we’re looking for to meet the needs of the Iowa Nutrient Reduction Strategy and to address both non-point source and point-source pollution.”
Governor’s original plan was met with chilly reception at Statehouse
Earlier this year, Branstad introduced a water quality funding proposal that ignited controversy in the legislature. The governor proposed extending an existing 1-cent sales tax that funds school infrastructure needs but then using some of the increased revenue for projects to improve water quality. His plan was met with a chilly reception by most state lawmakers, as they opposed redirecting those dollars away from schools.
House Republicans decided to come up with an alternative plan to Branstad’s, which they unveiled and explained on Monday of this week at the subcommittee meeting. Their proposal would take $232 million from the state’s Rebuild Iowa Infrastructure Fund, which collects about $190 million each year in state gambling revenue. The amount going to water quality from that fund would start at $5 million in the 2017 fiscal year and grow to $22 million in 2022 and beyond.
An additional $232 million would come from a tax Iowans already pay on metered water through their water bills. The state currently collects a 6-cent sales tax on that water sold and directs most of that revenue into the state general fund, with 1% going toward the school infrastructure fund.
New proposal’s funds would be split between urban and ag uses
The two amounts combined would total $464 million by 2029, which exceeds the amount Branstad originally proposed in his plan. That proposal would have generated about $435 million by 2029, according to the state Legislative Services Agency. However, over the long-term the House Republican plan falls short of Branstad’s targets. His original plan would have been in effect for an additional 20 years, generating nearly $5 billion by 2049.
The new proposal’s money would be split between uses for urban areas, which include wastewater and drinking water financial assistance programs, and as edge-of-field and in-field practices for farmers and landowners. While the new House plan would direct close to a half-billion dollars to water quality, it would be far short of the recommendations outlined in the Iowa Nutrient Reduction Strategy. That strategy, adopted in 2013, aims to reduce nitrate and phosphorus levels by 45% in the state’s streams, rivers and lakes and will cost an estimated $1.2 billion over 50 years.
Legislature is still considering other funding proposals, too
Senate majority leader Michael Gronstal, D-Council Bluffs, says the Senate would at least consider this new House Republican legislation if it is passed by the full House. “We will consider whatever the House puts together on this water quality issue,” he says, acknowledging that some senators prefer other proposals. “We still have people looking at the governor’s original proposal, and there are a couple other water quality funding proposals for discussion, such as the three-eighths of a cent sales tax idea.”
Gronstal’s comment is referring to the fact that in 2010, 63% of Iowa voters agreed to set up the Outdoor Recreation Trust Fund and authorized a three-eighth-cent sales tax to fund it. The Legislature so far hasn’t taken action to levy that tax, though it’s a move supported by many people in Iowa’s environmental community who see it as a way to raise more money faster.
The state’s non-partisan Legislative Services Agency projects that three-eighths-cent sales tax would raise about $180 million in its first year and increase in every subsequent year, totaling nearly $2.8 billion by 2029 and more than $10 billion by 2049. However, many Republicans in the Iowa Legislature say raising taxes to fund water quality projects is off the table, and they won’t support such legislation.