Iowa Gov. Terry Branstad last week introduced a budget that prioritizes a long-term, dedicated source of revenue for implementing projects outlined in the state’s Nutrient Reduction Strategy.
The budget also protects funding for supplemental state aid for K-12 education and property tax credits from $110 million in current-year budget cuts forced by lower-than-expected revenue projections. While last month’s revenue estimate is lower than previous projections, it still shows a modest increase in state revenues, Branstad noted.
"Although we have faced a headwind out of Washington, D.C., that is stifling our agricultural economy, we still have positive state revenue growth," he said. "But we must proceed with caution and not repeat the mistakes of the past."
In his 22nd and likely final condition of the state address, Branstad said water quality discussions should begin with the House-passed bill from last session, which would provide an estimated $477.9 million in state funding by 2029. Branstad’s budget would dedicate nearly $8 million in additional funding for water quality projects in fiscal 2018.
"By leading on this issue, together we have the opportunity to modernize Iowa’s agricultural infrastructure, create jobs in rural Iowa and promote collaboration between urban and rural communities," said Branstad, who last month was named ambassador to China by President-elect Donald Trump. "I hope we can work together to perfect and improve the legislation that will provide a long-term, dedicated and growing source of revenue for water-quality improvements.
Advancing water quality is one of the top priorities for the Iowa Farm Bureau Federation (IFBF) in the 2017 session, along with coupling with the federal tax code for Section 179 expensing and protecting property taxpayers.
Taking on the challenge
"Iowa farmers are taking on the challenge to do more for improving water quality and conserving the state’s valuable topsoil," says IFBF President Craig Hill. "Farmers have made significant progress in reducing nutrient loss in the past three decades and, as a number of surveys show, have embraced Iowa’s science-based Iowa Water Quality Initiative, otherwise known as the Nutrient Reduction Strategy.
"Our members will work with lawmakers this year to find dedicated, long-term funding that keeps the collaborative conservation work going between ISU researchers and farmers in the field. Their work is too valuable to be idled by a lack of funding."
Farm Bureau will work with legislators to focus on predictable tax policy that benefits farmers and small businesses, Hill said. The federal government passed legislation to permanently extend Section 179 asset expensing in late 2015. Iowa lawmakers retroactively coupled state tax code with federal tax code for Section 179 asset expensing, but only for the 2015 tax year.
"We’d like to see it permanently coupled at the $500,000 level," said Hill. "We are in the third year of a struggling farm economy, and farmers are urging lawmakers not to take this important economic tool away from them."
Property tax focus
Farm Bureau also will continue working with lawmakers to reduce the burdens placed on property taxpayers, including property tax contributions to Iowa’s mental health system.
"Iowans will pay more than $5 billion in property taxes this year, and the Legislature has the opportunity to address several measures that help protect property taxpayers from further increases. It’s time to do that," says Hill. "Farm Bureau will work to ensure that property taxpayer contributions to the state mental health system remain limited and controlled and to achieve equity between the contributions paid by rural Iowans and those in urban areas."
Branstad said cuts recommended in his budget are difficult, but they maintain funding for priorities including education, health care, economic development and public safety. He noted that 90 percent of Iowa’s general fund budget is spent on three items: K-12 education, Medicaid and employee wages and benefits.
"We are committed to a smaller, smarter government that seeks innovative ways to provide services rather than blind adherence to the way things have always been done," he said.
He urged lawmakers to set supplemental state aid for K-12 education in the first 30 days of the legislative session. His budget prioritizes educational initiatives including STEM (science, technology, engineering and math), Future Ready Iowa, registered apprenticeships and work-based learning for Iowa students.
Branstad also asked the legislature to undertake a comprehensive review of all state boards and commissions to address unnecessary barriers that prevent competition and raise costs.