How home solar helps everyone

Solar power not only saves on current generation of high-cost power; it reduces the need for future generating capacity. My own home system shows that.

IPP parody — apologies to Peanuts and the late Charles Shultz

It was a hot and sunny month. … No, this isn’t the opening line of a bad novel; it’s a story about electricity and climate change, and our backyard solar array.

July was indeed hot, which means it was a costly month for electric generation. When the heat index pushes over 100 degrees, and homes and businesses run their air conditioning full tilt, utilities have to purchase more expensive power, from less efficient generating stations, to meet the higher demand. Their costs, and the costs for every consumer, go up.

But here’s the good news. It was a sunny month, which means all those solar arrays at farms and businesses and in people’s back yards were generating power at a great rate. The recently installed array at our home generated 1,749 kilowatt hours of electricity from late June through late July. That was 510 kWh more than we used, for which we received a $14 credit from the utility. (When I use more electricity than I generate, I pay over 12 cents per kWh for the extra; when I generate more than I use, the utility pays me 2.8 cents per kWh.)

But all of that electricity we generated meant that the utility needed to purchase 1,749 kWh less power from the grid, power that was more expensive than average. That savings equates to about the amount of electricity used by two average residential customers in a month.

In the last session of the Iowa Legislature, MidAmerican Energy pushed a bill that would allow them to charge an extra monthly fee to future solar generators, people pretty much like us. That fee would have been enough to make installation of solar unattractive to many, which in turn would have devastated the growing solar installation industry in the state. Their rationale: People like me aren’t paying their share of costs for using the utility’s transmission facilities to sell our home-generated power back to the utility.

Every month I pay a $13.50 “facility charge” regardless of our usage or solar generation. The Iowa Utilities Board, which has to approve all changes in rates proposed by Iowa regulated utilities, is scheduled to undertake a study to see if these kinds of facility charges appropriately reflect the utilities’ cost of accommodating solar generation. But MidAmerican’s proposed bill would have pre-empted the normal rate-setting process with the utilities board and imposed the new fee by legislative fiat before the study was even undertaken to see if any fee was justified.

In pushing their bill, the utility or some unidentified group, sponsored TV advertising to try to get the average Iowan riled up by convincing them that they are subsidizing solar users.

But here’s the thing: Iowa is a summer peaking state. Despite the longer winter heating season, the summer air conditioning season is when electricity usage hits its daily or hourly maximum. All utilities use their most efficient, lower cost generating facilities first, and bring the higher cost facilities on line only when needed. So those high-cost facilities are brought into use just when solar power is doing its thing, when the hours of sunshine are greatest. That reduces the need for that high-cost power, which helps all utility customers.

More importantly, those summer peaks are likely to get worse as climate change worsens. Solar power not only saves on current generation of high-cost power; it reduces the need for future generating capacity by helping to reverse the trend of global warming. That is good not just for electricity consumers, but for the planet and for our grandchildren.

Peter Fisher is research director of the nonpartisan Iowa Policy Project. pfisher@iowapolicyproject.org

Ignoring still-serious water threat

Last year, we issued a report on toxic algae and three weeks later the city of Greenfield lost its drinking water. Now we see that the Environmental Working Group has found no improvement. How long before another town faces the same problem Greenfield did?

Iowa detail of map in report showing water test results.

About a year ago the Iowa Policy Project released a report on cyanobacteria in drinking water supplies and recreational waters. A new report from the Environmental Working Group shows things have not gotten better.

Microcystin and other cyanotoxins are still not regulated by the U.S. Safe Drinking Water Act. Thus, few drinking water systems test for them. These very dangerous natural chemicals are still on EPA’s candidate list for regulated contaminants but they have made it no further.

When it comes to beach monitoring for the same substances, Iowa still does not use the EPA’s recommended action level and prefers to use on more than twice as high, making any notice to beachgoers of the presence of microcystin less likely.

In high amounts cyanotoxins can make you sick and cause serious long term damage to human health. There are many reports of dogs dying after playing in ponds and licking their fur after.

The EWG report also found further evidence of what we reported last year in our report.

“The late summer months are usually the peak of the algae bloom season, though recent outbreaks are starting earlier and lasting longer. Increased rainfall and rising temperatures caused by the climate crisis are exacerbating the issue.”[1]

Later peaks in blooms and toxins means that the beach monitoring system will not see them since it ends in Iowa on Labor Day. True fewer people will be at beaches, but water supplies are vulnerable later into the year and no one is looking for microcystin in October.

Three weeks after IPP released its report in June 2018, the city of Greenfield, Iowa, closed its drinking water system for about a week because microsystin got in finished water. One wonders if in another three weeks after Thursday’s release we might see another town in the same predicament.

[1] Environmental Working Group, Aug. 8, 2019: “Report: Toxins From Algae Outbreaks Plague Hundreds of Lakes in 48 States,” https://www.ewg.org/release/report-toxins-algae-outbreaks-plague-hundreds-lakes-48-states

David Osterberg is former director and currently lead environmental researcher for the nonpartisan Iowa Policy Project.

dosterberg@iowapolicyproject.org

Common good vs. common blame

When leaders defy a “common good” standard in decisions, the ultimate price becomes a “common blame,” because government actions represent us all, even if they do not serve us all.

The Chris Godfrey case is only the latest example of a state leadership that — with no meaningful check on its authority — will do whatever it wants regardless of the consequences. They can, so they will.

And, for now, a jury has given the taxpayers of Iowa the consequences: a $1.5 million judgment against the state because of then-Governor Terry Branstad’s discrimination against a gay state official. Godfrey was state workers’ compensation commissioner when Branstad pressured him to resign, then cut his pay when Godfrey refused.

Branstad maintains the decision had nothing to do with Godfrey being gay. A jury disagreed. Either way, the totality of the case is disturbing.

When our state leaders defy a “common good” standard in making decisions, the ultimate pushback or price becomes a “common blame,” because the government actions represent us all, even if they do not serve us all.

We already see it in the issues surrounding Iowa’s poor water quality and the refusal of Iowa’s leaders to use public policy effectively to correct it. The voluntary Nutrient Reduction Strategy is not a strategy at all, but rather our imaginary friend who assures us we’ll do the right thing. Or our farmers will. Someday. But no one will make either us, or farmers, do the right thing unless already inclined to do so.

We see it when exorbitant tax breaks or subsidies go to corporations without a discernible return to the public, while services that benefit not only the corporations but all Iowans — such as a strong PK-12 and post-secondary education system — are held back or even cut.

And we see it here, in the Godfrey case. As the Cedar Rapids Gazette’s Todd Dorman pointed out in a column today:

The jury found Branstad was in the wrong. Now, of course, if the verdict stands, it will be you and I who likely pay the freight. Maybe those captains of industry Branstad tried so hard to please by bullying Godfrey could pass the hat.
And of course those “captains of industry” would have to pass the hat if they are to contribute, because we don’t tax them enough. We keep giving away subsidies and tax breaks like candy.

But this is about more than taxes. As our senior research consultant, Colin Gordon, noted in a blog yesterday, Branstad’s own defense — effectively that he did not discriminate against Godfrey but wanted him out because of what he had heard from business owners — is a problem in itself. It is something that Iowa’s leaders need to recognize as a problem and if they cannot, the voters need to. The state is not here as a service center for corporations, but to serve all Iowans. When individual Iowans are injured on the job, they need someone enforcing the law, as Godfrey was doing.

By his own admission, Governor Branstad was taking his cues from his business cronies. And if you read the transcript of his deposition in the case under questioning by attorney Roxanne Conlin, you can see he didn’t investigate beyond the anecdotal whining he was hearing from selected business people.

And Branstad won’t be held accountable for it. The people of Iowa will be, in our common blame.

Mike Owen is executive director of the nonpartisan Iowa Policy Project.
mikeowen@iowapolicyproject.org

Price of discrimination, business influence

Just as damning as our former governor’s pattern of discrimination is the defense he offered, that he targeted the workers’ compensation commissioner because business interests told him he had to go.

When Terry Branstad returned to the Governor’s Office in 2011, one of his first acts was to ask for the resignation of Iowa Workers’ Compensation Commissioner Chris Godfrey, who is openly gay. When Godfrey declined to resign, Branstad slashed his salary to $73,250 — a pay cut of nearly $40,000, which left Godfrey earning the statutory minimum for the job.

In 2012, Godfrey sued, claiming that Branstad had discriminated against him based on his sexual orientation. On July 15, a Polk County jury agreed — awarding Godfrey $1.5 million in damages.[1] At trial, Branstad claimed he had “always treated everyone, gay or straight, with respect and dignity,” but the jury determined the evidence pointed strongly in the other direction — and now Iowa taxpayers are paying the price.

Just as damning as our former governor’s pattern of discrimination is the defense he offered at trial, and in his pre-trial deposition.[2] By his account, Branstad took aim at Godfrey not because his workers’ compensation commissioner was gay, but because the Iowa business community — and especially meatpacking interests — told him that Godfrey had to go.

So, we have a jury calling out discrimination at the highest level of Iowa government, and effectively an admission from the former governor that the business lobby was calling the shots on a critical issue.

In his November 2014 deposition, Branstad details meetings in 2010 with Eldin and Regina Roth of Beef Products Inc (BPI) who “said they were concerned about the direction that the workers’ comp commission is going in Iowa, that it was driving up the costs of their businesses.” In July 2011, Branstad solicited a long memo from Tyson Foods[3] that offered the Governor a blow-by-blow account of “the negative impact [Godfrey’s] decisions have on Iowa Employers.”

When Branstad took office in 2011, his treatment of Godfrey was callous, petty and discriminatory. When Republicans achieved “trifecta” control of the Statehouse in 2017, the target shifted from the commissioner to the entire workers’ compensation system. At stake here was not just Godfrey’s job but — as we detailed in our report last year on the recent changes to Iowa’s workers’ compensation system[4]a fundamental shift in responsibility and risk for workplace injuries.

[1] Stephen Gruber-Miller, The Des Moines Register, July 15, 2019. https://www.desmoinesregister.com/story/news/politics/2019/07/15/terry-branstad-gay-official-discrimination-chris-godfrey-workers-compensation-commissioner-verdict/1714302001/

[2] https://www.documentcloud.org/documents/2644880-Gov-Terry-Branstad-deposition.html

[3] https://www.documentcloud.org/documents/2644850-Tyson-Foods-Talking-Points-for-Gov-Terry-Branstad.html
[4] Emily Schott, Matthew Glasson and Colin Gordon, The Iowa Policy Project, “Giving Workers the Cold Shoulder: Shifting the Risk Under Iowa’s Workers’ Compensation Law.” http://www.iowapolicyproject.org/2018docs/180920-workers_comp.pdf

Colin Gordon is senior research consultant for the nonpartisan Iowa Policy Project (IPP). A professor of history at the University of Iowa, he is the author of IPP’s long-running State of Working Iowa analysis. Contact: cgordonipp@gmail.com

Iowa: Better sorry than safe

The Iowa DNR says you as a beachgoer have no need to know if toxins in the water might have reached a level that the U.S. EPA believes demands caution.

Iowa environmental officials are taking an unusual position for people charged with protecting the citizens of the state: “Better sorry than safe.”

No, that’s probably not the message you heard from Mom or Dad.

But it is the effect of the Iowa Department of Natural Resources (DNR) position not to follow tougher rules on water quality to guide warnings to beachgoers.

DNR has decided that if toxins in water reach a risk level suggested by the U.S. Environmental Protection Agency (EPA) as right for a warning, that is on a need-to-know basis, and you as a beachgoer have no need to know before you dive in, or before your child or dog splashes around, maybe drinks a little of the lake in the process.

Iowa is sticking with a more relaxed standard, of 20 micrograms of the microsystin toxin per liter, instead of the EPA-recommended 8 microgram level.

The Gazette story by Erin Jordan comes almost a year to the day since an Iowa Policy Project report by Carolyn Buckingham, Mary Skopec and myself showed how little the state is doing to address increasing problems with cyanobacteria, or blue-green algae, in Iowa waters. The report noted DNR testing had shown increasing numbers of beach advisories from 2009 through 2016, and increases in the number of lakes with advisories against swimming, due to microsystin levels — 17 of the 39 monitored beaches (graph below). And that was recorded under the weaker standard of 20 micrograms per liter.

Microsystin advisories for Iowa lakes, 2006-16Climate change and increased nutrient runoff contribute to increased algal blooms at the heart of the problem. If the number of advisories and lakes affected were to rise even more because of tougher standards, that likely would drive more Iowans to push for changes in policy to address the causes.

Safe might not be the top priority.

Sorry.

David Osterberg is lead environmental researcher and former executive director of the nonpartisan Iowa Policy Project, and professor emeritus of occupational and environmental health at the University of Iowa. dosterberg@iowapolicyproject.org

Better target senior tax breaks

Why should a senior retired couple pay less income tax than a working couple with similar or even less income? That can be the situation in Iowa, and many other states.

Also see Iowa Fiscal Partnership news release

A new paper about state tax breaks for seniors shows one reason pre-2020 chatter about new tax breaks in Iowa is a bad idea.

Elizabeth McNichol of the Center on Budget and Policy Priorities (CBPP) notes in her report Wednesday that special income-tax breaks for seniors cost states 7 percent on average in 2013, a figure that will rise with growth in the population over 65.

As McNichol notes, “The senior tax breaks are poorly targeted because of their design: most states provide them regardless of the recipient’s income or savings.”

Put another way: Why should a senior retired couple pay less income tax than a working couple with similar or even less income? That can be the situation in Iowa, and — as McNichol notes — in many other states as well.

It is a point Peter Fisher and Charles Bruner have made in Iowa Fiscal Partnership (IFP) analysis over the years about Iowa’s special breaks for pension income, and as legislators phased out what had already been a limited tax on Social Security income.

Already, Iowa has freshly passed, costly and inequitable tax cuts scheduled to be phased in over the next few years, yet state legislators just last week were talking about bigger cuts in 2020. Given attempts to expand senior breaks in 2018, but not adopted in the final package, there is a danger that new income-tax cuts in 2020 could include the new senior breaks.

Among changes considered in 2018 was an expansion of Iowa’s already generous pension exclusion from $6,000 (single) and $12,000 (couple) to $10,000 and $20,000, respectively.

McNichol’s paper notes Iowa is one of 28 states that already completely exempts Social Security income from tax, and one of 26 that exempts at least some pension income.

Iowa, in short, is already quite generous to retirees. Also as McNichol notes, for some this might make sense — seniors at low incomes. But not all.

“A large share of these costly breaks go to higher-income seniors who need them the least. States should reduce this expense by better targeting relief to seniors with low incomes,” she wrote.

Bruner and Fisher noted this problem in their IFP paper last year:

Iowa has adopted a number of special provisions benefiting seniors. While the elderly and disabled property tax credit is available only for those with low income, the other tax preferences are not based on ability to pay:

•   All Social Security benefits are exempt from tax.

•   The first $6,000 in pension benefits per person ($12,000 per married couple) is exempt from tax.

•   Those age 65 or older receive an additional $20 personal credit.

•   While non-elderly taxpayers are exempt from tax on the first $9,000 of income, for those age 65 or older, the exemption rises to $24,000. For married couples, the threshold is $13,500 for the non-elderly, but $32,000 for seniors.

Iowa Fiscal Partnership analysis of tax policy and tax proposals is always grounded in fundamental principles of taxation, among them fairness: Similarly situated taxpayers should be treated similarly in tax policy.

What matters more to measure a taxpayer’s ability to pay is the amount of income, rather than its source. To tax income from wages at a higher rate than retirement income violates that principle.

Mike Owen is executive director of the nonpartisan Iowa Policy Project and director of the Iowa Fiscal Partnership, a joint effort of IPP and the nonpartisan Child and Family Policy Center in Des Moines. mikeowen@iowapolicyproject.org

Tax-cutters’ lack of confidence

Plans for election-year tax cuts expose tax-cutters’ lack of confidence that (1) cuts they already made will deliver prosperity, and (2) they will hold power beyond 2020.

In the confidence game of cutting taxes, where the world is promised to all but delivered mainly to the wealthy, Iowa’s tax-cutters are showing how little confidence they have in their own political talk.

State Senator Randy Feenstra of Hull is backing off his chairmanship of the Senate Ways and Means Committee as he runs for Congress in 2020, leaving the door open to Senator Jake Chapman of Adel.

Both have been big talkers painting the glories of tax cuts while running down Iowa’s competitive tax structure, and they have been successful using that political spin to make big changes — many of which are scheduled but yet to take effect.

Even then, they apparently will waste no time in rushing through new tax cuts, as evidenced by this story in the Cedar Rapids Gazette. There, Chapman is quoted that “he expected the Legislature would continue next session ‘to reform income taxes and reduce some of the highest tax rates in the country.’”

Before addressing the fundamental inaccuracy of the senator’s comment, one must wonder at least two things:

•   Are they not confident what they have passed already will not deliver what they promised?
•   Are they not confident they will retain political power through the Statehouse (the House is a much closer partisan split than the Senate) past the 2020 election?

Answering “yes” to either would explain their perceived need to rush more ill-advised tax policy into law.

In a very short span, Iowa lawmakers have eroded revenues with new tax giveaways to the wealthy and powerful, leaving scraps to working families in the middle and below. This has come with changes in personal income taxes, corporate income taxes and property taxes.

As Peter Fisher and Charles Bruner pointed out in an Iowa Fiscal Partnership analysis, the income-tax cuts passed in 2018 give almost half of the overall benefit to the highest-earning 2.5 percent of taxpayers — those making $250,000 or more.

Senator Chapman plays games with the term “tax rates” as if the highest tax rate is what anyone ever paid on all their income. It’s an illusion.

The highest rate — already reduced from 8.98 percent to 8.53 percent this year under the 2018 law — is a marginal rate; it is paid on only the highest share of income. The same taxpayer who pays the highest rate on one share of income also pays the lowest rate on the share of income where that rate applies.

In short, it’s a mix of rates — and they are applied to taxable income, which has many adjustments to lower that amount. Most notable among those is Iowa’s unusual provision to allow taxpayers to deduct federal income tax from state taxable income, which benefits higher-income people the most.

The tax-rate myth promoted by Senator Chapman is an old game, but the people who want to reduce public services and investments in the future keep playing it. And why not? They’re getting away with it.

The 2018 legislation includes ongoing rate cuts — if revenues reach high-enough levels. One reason to pass rate cuts again in 2020, before that deadline, is that you don’t expect the revenue targets to be met.

These changes have come at great cost to public services, including poor funding of public education from K-12 through community colleges and universities.

Looking ahead to the future of our state, and beyond the next election, would be the wisest course for Iowa tax policy. That is not what we’re getting.

Mike Owen is executive director of the nonpartisan Iowa Policy Project and director of the Iowa Fiscal Partnership, a joint effort of IPP and the nonpartisan Child and Family Policy Center in Des Moines. mikeowen@iowapolicyproject.org