Iowa Governor Terry Branstad’s plan to divert some state sales taxes collected for school infrastructure and spend it on water quality projects in the future has cleared its first statehouse hurdle.
A House SUB-committee gave tentative approval to the bill (Monday), but adjustments to the plan are expected before the bill is voted upon by the House Ag Committee. Some legislators oppose the tax shift, while others are proposing alternative plans. A one-percent sales tax is currently collected in Iowa and distributed to schools for construction and renovation of school facilities as well as property tax relief. Branstad proposes extending the tax through 2049 and using inflationary growth for water quality projects. Emily Piper, a lobbyist for the Iowa Association of School Boards, warns the bill as currently crafted will cut the amount of tax relief for Iowa property owners.
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Bob Rafferty, a lobbyist for the Iowa American Water Company, says his investor-owned utility wants to be able to apply for the new state water quality grants.
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Among the alternative ideas: raising the state sales tax by one percent and dedicating a portion of the money raised to water quality. Another legislator has proposed a dramatic reduction in property taxes for property owners who install conservation measures to reduce run-off and improve water quality.