Iowa Gov. Terry Branstad last week proposed a plan that he says can help school districts with long-term infrastructure needs, provide a dedicated source of state funds for soil conservation and water quality improvements, while protecting taxpayers.
Calling it the "biggest and boldest initiative" of his record-setting career as governor, Branstad said his proposal would extend the existing one-cent sales tax for school infrastructure through 2049, or 20 years beyond the current expiration in 2029. A portion of new revenues generated from the sales tax would then be dedicated to be used for conservation and water quality projects, under the plan.
"I look at it as a win-win for schools, for water quality and the taxpayers," Branstad said Jan. 5 after unveiling the proposal at the Iowa Statehouse, along with U.S. Agriculture Secretary Tom Vilsack and Lt. Gov. Kim Reynolds. "Too often the simple answer for more funding is just raise taxes. Today I’m here to share a different, innovative, unique approach to how we can meet these needs without raising taxes."
Reynolds said the proposal embodies Iowa’s tradition of working together to overcome challenges. "The powerful message today is that school superintendents are standing with farmers with the common Iowa refrain of ‘let’s work together,’ " she said.
Farm Bureau is encouraged that the governor is seeking ways to fund continued conservation progress in Iowa, said Craig Hill, Iowa Farm Bureau Federation president.
"Farm Bureau members are exploring all options that will offer the most promise to help advance the EPA-endorsed Nutrient Reduction Strategy," Hill said. "For several years, we have advocated at the Statehouse for increased water quality and conservation funding, which is specifically and wholly earmarked for proven conservation practices to ensure continuous improvement. As lawmakers get ready to start the 2016 legislative session, Farm Bureau members look forward to assessing all proposals that can continue the conservation momentum and bring in-field, proven water quality progress to this state."
Branstad said his plan, which he will present to the Iowa Legislature during the 2016 session that begins this week, will help school districts because it will add certainty to their efforts to fund infrastructure improvements. Branstad and some school superintendents said last week the extension beyond 2029 is essential for districts to allow them to issue bonds for long-term infrastructure projects.
The proposed plan, the Iowa governor said, would protect the funding that the state’s school districts now receive through the infrastructure program known as "Secure an Advanced Vision for Education," or SAVE, and would add an additional $10 million per year. The governor’s proposal is projected by the Iowa Department of Revenue to provide $20.8 billion for school infrastructure improvements over a 32-year period from 2017 through 2049.
"With a 20-year extension, that will allow us to move forward on projects," said Paul Gausman, superintendent of the Sioux City school district, who supported Branstad’s proposal at the Statehouse announcement. He said the SAVE program has been instrumental in helping the Sioux City district update aging schools, while protecting property taxpayers.
Additional revenues raised by the SAVE program, beyond the $10 million, would be used to support water quality projects through Iowa’s Nutrient Reduction Strategy. The Iowa Department of Revenue projects Branstad’s plan would raise $4.7 billion for water quality initiatives over a 32-year period from 2017 through 2049.
"This would be an extraordinary investment and have a huge impact," Branstad said. "It would allow Iowa to fund the evidence-based Nutrient Reduction Strategy with a dedicated funding source."
The funding, Branstad said, would be used to enhance the state’s revolving fund that helps finance conservation and water quality projects, to allow the state to offer additional cost-share money and to spur cooperation with existing U.S. Department of Agriculture conservation programs.
Vilsack offered support for Branstad’s plan, saying it would build the momentum for conservation and water quality in Iowa. He said the added state funding would also lead to better state, federal and local coordination of proven water quality programs.
"I suspect that all of us believe the ultimate resolution of the water quality issue will be a collaborative effort between federal, state and local governments, working with farmers and small towns," Vilsack said. "That’s why I’m here today, because I believe in that approach."
The dedicated funding for conservation and water quality would help the state and federal governments move more quickly to help farmers implement practices, Vilsack said. "It is not as if there is an unlimited period of time to work on water quality issues. The reality is we need to work on it now," he said.
Currently, the SAVE one-cent sales tax is exclusively dedicated to K-12 school infrastructure and property tax relief. The sales tax will generate $458 million this year and is scheduled to sunset in 2029.
At the Iowa Farm Bureau annual policy session in September, county voting delegates supported removing the sunset as well as increased voter input and property tax reductions when making school infrastructure decisions.