Improve water quality funding equitably

Expand existing state programs to improve waters and overall balance in Iowa tax system.

Iowa has an opportunity to advance equity while improving water quality. The constitutional amendment voters overwhelmingly passed in 2010 gave us the option to fund water quality programs with the sales tax, but it’s only a starting place, and we need to explore more equitable funding solutions.

The sales-tax option needs to be paired with options that enhance equity in the way we fund all public services. A comprehensive approach adds other sources — even as we recognize that Iowa policy makers have refused the voters’ clearly stated desire for action.

A new IPP report offers policy options to improve water quality in an equitable way. Iowa voters, in a 2010 statewide referendum, showed their willingness to raise the sales tax in order to fund water quality efforts. The trust fund they authorized remains empty today, nine years later.

As we noted in an April 2019 report, Iowa water quality funding is inadequate.[1] Some will claim new water-quality funding passed in 2018, but it was at best window dressing. New programs had no new revenue source and added little to the mainly federal nutrient reduction funding that exists now.

The sales-tax option remains on the table and is promoted by serious advocates for action. The challenge is to find a way to offset the impact of a sales-tax increase on lower- and moderate-income households. Already, those lower-income families pay the most of any income group, as a percentage of their income, on sales tax. This drives the overall regressive nature of Iowa’s state and local tax system.[2] Analysis from the Institute on Taxation and Economic Policy (ITEP) shows why a tax on purchases hits lower income families harder (see graph). Lower-income families spend most of what they earn, and they spend a large share of it on goods and services that are subject to the state sales tax. This is less the case the higher you go on the income scale.

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How to fix it? We see two immediate options using existing programs: Boost the Earned Income Tax Credit (EITC) to help working families, and expand Disabled and Senior Citizen Property Tax Credit and Rent Reimbursement Program.

How to pay for it? Use at least part of the revenue from a 1-cent sales tax increase. The constitutional amendment directs three-eights of the first cent to the clean water and recreation trust fund. The key is what happens with the other five-eighths.

According to ITEP data, increasing the state EITC to 20.5 percent of the federal credit (from the current 15 percent) would fully offset that average $124 yearly sales-tax increase for a working family eligible for the EITC. The Rent Reimbursement program can contribute for other low-income families. Those two steps — EITC and Rent Reimbursement — would cost an estimated $30 million,[3] only a small share of the “extra” sales-tax revenue from a 1-cent increase

Taxing the polluter is another policy option for addressing a broader equity concern. Fertilizer used in the agricultural sector is the source of the contamination, yet it is exempt from the general Iowa sales tax. Removing the fertilizer exemption would bring a substantial source of water quality funding: about $110 million annually.[4]

In an already tax system favoring the highest earners, raising the sales tax is not a preferred option. But it can be improved and turned into an opportunity to both improve services and the overall balance in Iowa’s tax system. Those interested in both equity and clean water could embrace that opportunity.

[1] David Osterberg and Natalie Veldhouse, “Lip Service: Iowa’s Inadequate Commitment to Clean Water.” April 2019. Iowa Policy Project. http://iowapolicyproject.org/2019docs/190424-WQfunding.pdf

[2] Institute on Taxation and Economic Policy, “Iowa: Who Pays? 6th Edition.” October 2018. https://itep.org/whopays/iowa/

[3] EITC: $124 for each of the 209,000 taxpayers who receive this credit equals $25,916,000. Renters’ credit: $124 for each of the 32,000 who receive the credit equals $3,968,000. Total about $30 million for the two programs.

[4] $1,845,469,000 X 6 % = $ 110,728,140. The total in the 2017 Census of Agriculture was much smaller than the 2012 figure $2,587,059,000.

 

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Natalie Veldhouse is a research associate for the nonpartisan Iowa Policy Project. nveldhouse@iowapolicyproject.org

Water funding exposes shallow commitment

Recent initiative fails to meet needs to improve Iowa water quality

Voters have indicated their support for increasing funding to improve water quality in Iowa, earmarking part of the next sales tax increase for clean water. So far, the protected trust fund for outdoor recreation and water quality remains empty.

Our latest water quality report addresses these issues:

  • What has been the state’s spending commitment to water quality over the past 15 years?
  • How much of state and federal dollars goes to reduce nutrient pollution in Iowa?
  • How much spending is needed to make meaningful water quality progress?
  • How can the state raise adequate revenue to make an impact?

We identified 16 primarily state-level programs that fund water quality improvements. Funding in the most recent year hasn’t even reached 2008 to 2009 levels.

The Nutrient Reduction Strategy (NRS), implemented in 2013, was created to reduce nutrient pollution that creates a hypoxic dead zone in the Gulf of Mexico. The strategy was advertised as a new commitment by the state to reduce Iowa’s pollution of our own rivers and the Gulf of Mexico. Even with the NRS, we find that state water quality spending has dropped off and struggled to return to pre-2008 recession levels.

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The Water Resources Coordinating Council is tasked with overseeing NRS progress, and measures the financial resources dedicated to reducing nutrient pollution from the state of Iowa to the Mississippi River system. The most recent NRS report shows $512 million was spent in state and federal dollars on Iowa nutrient reduction in 2017.[1] However, the state is largely riding the wave here; the real money comes from federal funding.

While it was assumed that adopting the NRS would increase Iowa’s commitment to water quality, it did not — though at the same time pollution has increased. Recent research indicates Iowa’s share of nutrient loading into the Mississippi and Missouri river watersheds actually increased between 2000 and 2016.[2]

In 2018, Governor Kim Reynolds signed a bill that appropriates $282 million to water quality efforts over the next 12 years.[3] This gesture compares poorly even to existing — and lacking — government water quality spending. Iowa is nowhere near to what is needed.

How much money does it really take to make a meaningful impact on Iowa water quality? The NRS document, written mainly by Iowa State University, estimated the cost of reducing nonpoint contamination under three scenarios. All were in the billions of dollars.

The Iowa Soybean Association estimates for nutrient reduction costs in just one river basin, the Lime Creek Watershed,[4] implies a statewide need of $1.4 billion a year for about 15 years. These estimates demonstrate the inadequacy of the 2018 spending bill.

Current investments are not resulting in discernible improvements in Iowa’s water quality. Two options available for generating the amount of revenue needed include removing the exemption of fertilizer used in agriculture and taxing it like other commodities.

A second option is fully funding the environmental trust that voters approved in a statewide referendum in 2010. Estimated revenue from either of these sources would bring more than $100 million per year. We need to tap new sources to make our state commitment to water quality equal to the task. Until then, we are only paying lip service to the problem.

[1] Iowa Water Resources Coordinating Council, “Iowa Nutrient Reduction Strategy 2017-2018 Annual Progress Report. Page 9.

http://www.nutrientstrategy.iastate.edu/sites/default/files/documents/NRS2018AnnualReportDocs/INRS_2018_AnnualReport_PartOne_Final_R20190304_WithSummary.pdf

[2] Christopher Jones, Jacob Nielsen, Keith Schilling, & Larry Weber, “Iowa stream nitrate in the Gulf of Mexico.” April 2018. PLOS. https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0195930&type=printable

[3] Brianne Pfannenstiel, “Reynolds signs water quality bill, her first as governor.” January 2018. https://www.desmoinesregister.com/story/news/politics/2018/01/31/reynolds-signs-water-quality-bill-her-first-governor/1082084001/

[4] Iowa Soybean Association Environmental Programs & Services, “Lime Creek Watershed Improvement Plan: A roadmap for improved water quality, sustained agricultural productivity & reduced flood risk. N.D. https://www.iasoybeans.com/search/?q=lime+creek

 

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Natalie Veldhouse is a research associate for the nonpartisan Iowa Policy Project. nveldhouse@iowapolicyproject.org

Courageous words about ‘timid’ funding

Even a farm group may face consequences for daring to challenge Iowa’s poor funding of water quality efforts.

Even farm groups dare not question the timid funding of water quality

Recently the Cedar Rapids Gazette reported a slapdown of the Iowa Soybean Association by the Iowa Legislature.

Thanks to reporting by Erin Jordan of The Gazette, we learn now that a year ago, legislators were angered by comments from Iowa’s main soybean group that Governor Kim Reynolds’ first bill as governor — new money for water quality — was “timid.”

Partly because of that remark, the Gazette reported, legislators stuck back against the group by taking $300,000 in state funds away. Ironically, those funds had gone for research on water quality improvement.

In her article, Soybean group pays price for calling water bill ‘timid’, Jordan reported:

The Soybean Association had received $400,000 a year in state funding for the On-Farm Network, a program that helps farmers gather data to better manage nitrate fertilizer application on their cornfields. More precise application means less money spent on fertilizer and less excess nitrate washing into lakes and waterways.

IPP used some of the data collected by the Iowa Soybean Association in our recent report on water quality funding by the state. We called our paper “Lip Service” since that is about all Iowans are getting from their top leaders in response to widespread concerns about water quality in the state.

The Iowa Soybean Association research was very good. We found it to be the best out there on what improving nutrient pollution from agriculture was likely to cost. Now, that research has been curtailed because that organization had the temerity to tell the truth about the big talk and little money the state gives to improve water quality in the state.

To read our report or a one-page executive summary, visit the Iowa Policy Project website at http://www.iowapolicyproject.org.

David Osterberg is lead environment and energy researcher at the Iowa Policy Project, which he co-founded in 2001.

dosterberg@iowapolicyproject.org

Bill Stowe: Water quality hero

Bill Stowe’s courageous fight for clean water lives on.

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Bill Stowe speaks at IPP’s 15th anniversary event in September 2016. (Photo: Lance Coles)

Bill Stowe, dead at 60. The average American male born in 1959 should live about another 10 years. But there was nothing average about Bill Stowe.

The average male does not get three advanced degrees from three different institutions. The average American, male or female, does not take on the strongest and most powerful to change public debate, and force accountability where it was lacking.

Bill ran the Des Moines Water Works (DMWW), the largest supplier of clean drinking water in Iowa. It was a surface water system. That means it had to deal with the serious pollution that unrestrained agricultural practices put into Iowa waters — a costly and unsustainable proposition.

Realizing he could not continue to pass on the costs of treating that water to his customers alone, he took action — courageous action in an agricultural state — to either get the polluters to stop, or at least to pay for the problems they are causing.

The case of the Des Moines Water Works vs. three Iowa counties with drainage districts that were some of the main polluters of the Raccoon River went to federal court. It scared agricultural organizations like the various state Farm Bureau federations.

As Stowe and DMWW fought “dark money”-funded interests in court, he gained both foes who favor the status quo and allies who shared either the lawsuit’s goals or the desire to help Iowans see what big industry was up to. Others joined the fight, including one small-town journalist who won a Pulitzer Prize, and activists who keep his fight alive today.

Bill lost his case in court, but pushed water quality more squarely into Iowa’s political and policy spotlight, forcing politicians including Terry Branstad to concede a need to do something — even though their actions have fallen short.

Bill Stowe was generous with his time and talked to groups about treating water to make it safe. He taught a class of mine.

160314-Stowe-DO classThe picture above was from three years ago when we visited the treatment works he served. He spoke often to groups about his passion for clean water all around the state — including as the featured speaker for the 15th anniversary of our organization in 2016.

When IPP considers what papers to investigate we often ask knowledgeable people around the state for thoughts on what would be helpful to better inform public debate. Bill had suggestions for our latest series of reports on water quality.

When IPP researcher Natalie Veldhouse and I met with him and his DMWW colleague Laura Sarcone in November, they had good suggestions that helped us in the development of our latest paper. When I sent a copy of that paper to Laura for her thoughts, I did not know that Bill was already in hospice.

Bill died too soon. His fight for clean water remains important for all Iowans.

2016-osterberg_5464David Osterberg is co-founder, former executive director and lead environment and energy researcher for the Iowa Policy Project. dosterberg@iowapolicyproject.org

New evidence on old water problem: It’s grown, and is getting worse

Vegetative buffers can address the main causes of the worsening algal bloom problem: climate change and nutrient runoff.

The Iowa Policy Project released a new report that brings attention to the harmful algal bloom problem that is not being addressed adequately in the state.

There have been numerous reports and articles that discuss the problem, including an IPP report that was released nearly 10 years ago, but what is different about this new report is that it highlights new science and evidence that indicates that the problem is growing worse.

The 2014 water crisis in Toledo, Ohio, where toxic blue-green algae shut down the water system, was a wake-up call for those responsible for ensuring our drinking water is safe. The U.S. Environmental Protection Agency and the Iowa Department of Natural Resources are therefore aware of the looming threat posed by blue-green algae.

Recent studies have shown that the harmful algal bloom problem is more prolific and this is tied to changes in weather and landscapes due to climate change and due to increased nutrient runoff.

Iowa’s Nutrient Reduction Strategy is a framework that was created to address the runoff issue in Iowa but new evidence suggests that the NRS is not enough to tackle the problem.

One approach endorsed by IPP’s new report may be effective in protecting Iowans from harmful algal blooms: the implementation of mandatory vegetative buffers throughout the state. Minnesota and Vermont already have promulgated such laws for regulations and buffers along waterways —a conservation practice proven to dramatically reduce nutrient runoff.

Buffers also have an added benefit in that they can act as a carbon sink or as carbon storage, thereby helping to curb climate change. In other words, vegetative buffers can address the main causes of the worsening algal bloom problem: climate change and nutrient runoff.

Carolyn Buckingham, an attorney with a background in environmental law and policy, is lead author of a new report for IPP on issues caused by cyanobacteria, or blue-green algae, in Iowa water.

Find the report here.

Session Recap: ‘Historic’ — not label of pride

Some legislators may boast of a “historic” session. History will mark 2017 as a low point in Iowans’ respect and care for each other.

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4/22/17

IFP Statement: ‘Historic’ session not a label of pride

Legislative session hits working families and traditions of good governance

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Statement of Iowa Fiscal Partnership • Mike Owen, Iowa Policy Project

To describe the 2017 Iowa legislative session as “historic” is not a label its leaders should wear with pride.

Iowans needed a legislative session that worked to raise family incomes and expand educational opportunity. Iowans had long demanded water-quality improvement measures. Many called for lawmakers to address the lack of fairness, adequacy and accountability in a tax system laden with special-interest breaks and costly subsidies to corporations.

Instead, Iowans got a continued ratcheting down of funding for PK-12 public education. There were significant and serious cuts in post-secondary education that will lead to tuition increases. We saw cuts to early-childhood education and other programs that serve our most at-risk children and neglect of the child-care assistance program that helps working families struggling to get by.

The Legislature continues to demand little or nothing of industrial agriculture in cleaning up the mess it has left in our waters. Lawmakers tried to dismantle the Des Moines Water Works board, limited neighbors’ right to complain in court about pollution, and eliminated scientific research at the Leopold Center. Their ultimate action on water merely diverts resources from other priorities, such as education and public safety.

Lawmakers largely left the tax issue to the next session. An overture in the House to reform Iowa’s reckless system of tax credits was a welcome acknowledgment that this issue needs attention, but devils in the details make further discussion of this issue during the interim even more welcome.

Perhaps as troubling as the destructive nature of policy content this session, Iowa’s image of adherence to good governance took a big hit. The most controversial policy changes came not through collaborative, public discussion in committee, let alone the 2016 political campaigns, but were often dumped into lawmakers’ laps with little opportunity for amendments.

In what could accurately be called a “session of suppression,” lawmakers achieved:

  • Wage suppression, with a bill to preempt local minimum wage increases while refusing to raise Iowa’s repressive, 9-year-old minimum of $7.25.
  • Workplace suppression, gutting collective bargaining protections for public employees, and making it more difficult for Iowans recover financially from injuries on the job.
  • Health-care suppression, achieved in workers’ compensation legislation while also refusing to reverse Governor Branstad’s disastrous move to privatize Medicaid.
  • Local suppression, whacking at local government control in a variety of areas: minimum wage, legal defenses against concentrated animal feeding operations (CAFOs), fireworks sales, and collective bargaining options.
  • Voter suppression, with a bill to make it more difficult for many citizens, particularly low-income and senior voters, to exercise their right to vote.
  • Suppression of children’s healthy development, with additional cuts to Early Childhood Iowa and Shared Visions that will reduce access to critical home visitation, child care and preschool services for some of our most at-risk youngsters.

Some legislators may boast of a “historic” session. History will mark 2017 as a low point in Iowans’ respect and care for each other, a legacy that will not be celebrated when future Iowans look back on this session and the closing act of Governor Branstad’s long tenure in office.

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The Iowa Fiscal Partnership is a joint public policy analysis initiative of two nonpartisan, nonprofit, Iowa-based organizations — the Iowa Policy Project in Iowa City, and the Child & Family Policy Center in Des Moines. Reports are available at www.iowafiscal.org, and on the websites of the two partner organizations, www.iowapolicyproject.org and www.cfpciowa.org.

Big state, big issues — an obligation for all

We all have an obligation to clean up our rivers lakes and streams and no sector can be exempt. It is not a voluntary matter.

160104-osterberg-map-7x7I put up a new map at the IPP office this morning. It’s a big one — about 4 feet by 6 feet, and it’s impressive on a wall.

What makes it more impressive comes when you think of what that map represents, some 36 million acres of land, and to think of how those acres are used, and what we are doing to protect them.

Even though it’s mainly a road map, we see those roads plotted on a landscape that we know is mostly farmland — rivers, lakes and streams running through it, and dominated by it.

Each five years the United States Department of Agriculture puts out a census of agriculture. The last one from 2012 shows just how agriculture dominates our land. About 24 of the 36 million acres are in cropland nearly all corn and soybeans — though even more land is agricultural since activities like grazing push the total of ag land well beyond 30 million acres. Cropland, woodland and pasture make up so much of the landscape that the category house lots, ponds, roads, wasteland, etc. makes up only 1.4 million acres, or less than 5 percent of the total.

IPP pointed out in a 2010 report Solution to Pollution: It Starts on the Farm that so little land in Iowa is devoted to urban uses (lawns or golf courses) that even if urban application rates of Nitrogen and Phosphorous fertilizer were much higher than that on farms, only 2 percent of the pollution from land application of fertilizer comes from lawns and golf courses.

When sewage treatment plants are included in the urban share of nutrient pollution, agriculture still dominates.

So the take-away message — water pollution in Iowa comes from agricultural land. We all have an obligation to clean up our rivers, lakes and streams and no sector can be exempt — particularly the biggest one. It is not a voluntary matter.

IPP-osterberg-75Posted by David Osterberg, co-founder of the Iowa Policy Project