The key word: trust.
Don’t forget that word as Iowa lawmakers discuss a sales tax increase, because some, including Governor Kim Reynolds, already are forgetting it.
Iowa voters in 2010 approved a constitutional amendment to create a trust fund to guarantee more funding for outdoor recreation and water quality. In that same election they elected Kim Reynolds to statewide office, as lieutenant governor on a ticket with returning Governor Terry Branstad.
Voters knew what they were approving with the trust fund because they had a law to consult. And that law — Chapter 461, the Natural Resources and Outdoor Recreation Act — specified how the funding would be apportioned among various purposes. It also specified that this would be new money. As the law states in section 461.31.2(c):
"Trust fund moneys shall supplement and not replace moneys appropriated by the general assembly to support the constitutional purposes provided in section 461.3."
This is the first violation of trust by Governor Reynolds. Her proposal envisions not $180 million from a three-eighths-cent sales tax to "supplement" existing funding for the purposes voters wanted expanded by creating the Trust Fund. Rather, she is proposing at least partially to replace funds that already go to natural resources.
The second violation of trust comes with revisions to the formula that voters had reason to expect would be followed when the funding ultimately was approved.
The governor claims "the challenges we face today and will face tomorrow are different than what we understood them to be 10 years ago, so it’s time to amend the formula."
She has presented no factual case that these challenges are different — they indeed might be quite more substantial in 2020 than they were in 2010. But that is an issue of failed stewardship, not an untapped formula.
The 2010 law lays out the formula voters would have assumed:
* Natural resources establishment, restoration and enhancement, 23 percent.
* Soil conservation and water protection, 20 percent.
* Watershed protection, 14 percent.
* Iowa Resources Enhancement and Protection fund (REAP), 13 percent.
* Local conservation initiatives, 13 percent.
* Trails design, maintenance and expansion, 10 percent.
* Lake restoration and water quality improvement, 7 percent.
The proposed new formula gets rid of much Outdoor Recreation funding that voters would have expected (and a named purpose of the trust fund). The new plan cuts trails, REAP, local conservation initiatives and much of the funding to the Department of Natural Resources. The formula change reduces outdoor recreation so more can be given to agriculture interests to reduce their water pollution.
Third, the governor is agreeing to deliver on the voters’ consent to a tax increase only on the condition that she can cut other taxes by a greater amount. She wants unwarranted and significant cuts in the income tax that are guaranteed to hinder other services, from education to corrections to safety-net supports.
Voters did not approve language supporting income-tax cuts. This is a violation of their trust.
All of this is a cruel irony for voters who supported the trust fund and agreed to a sales tax increase largely to address farm pollution in Iowa waters and for outdoor recreation, both of which benefit all of us.
Changing the formula means farm operations will be big winners — having taxpayers clean up their pollution mess while not paying the increased sales tax. From fertilizer and soil amendments to combines and tractors, farm operations are exempt from the sales taxes.
The governor’s proposal breaks the trust established by voters’ approval of the constitutional amendment — approval that came, by the way, with greater support than the Branstad-Reynolds ticket got in that same 2010 election.
Trust. It matters.
David Osterberg is co-founder and Mike Owen is executive director of the Iowa Policy Project in Iowa City.
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