2018 Market Outlook MeetingsDate: Jan 10 - 25, 2018
Hear from industry professionals at one of our upcoming grain market outlook meetings. 14 meetings will be held to better serve our member-owners.
The 2017 session of the Iowa Legislature gets underway January 9 and a number of groups will lobby lawmakers this year to increase state funding for water quality programs. That includes the Iowa Farm Bureau which passed a resolution calling for finding water quality financing from new or existing state revenues. It’s a shift for Iowa’s largest farm organization, a strong tax opponent that previously had asked lawmakers to fund water quality initiatives from the state’s existing budget.
Farm Bureau President Craig Hill says the resolution gives the organization the ability to more strongly advocate for water-quality funding proposals that might emerge in the 2017 legislative session. He says the goal is to be part of the solution in finding new revenue sources “to adequately fund the state’s Nutrient Reduction Strategy.”
The Iowa Nutrient Reduction Strategy (NRS) calls for reducing nitrogen and phosphorus losses to streams, rivers and lakes by 45%. It’s a voluntary strategy and has no timetable. State officials, including Iowa Secretary of Agriculture Bill Northey, estimate it could cost several billion dollars in one-time costs and $750 million to $1.2 billion annually over several decades to meet the water quality goals.
The Iowa NRS annual progress report is prepared by the Iowa Department of Agriculture & Land Stewardship, the Iowa Department of Natural Resources and Iowa State University. The report has identified nearly $350 million in state and federal funds directed to programs with water quality benefits in Iowa in 2016. This total does not include the cost-share amount farmers pay to match state and federal funds and it doesn’t include practices farmers built without government assistance. While the $350 million is significant and helpful, what these numbers show is that more cost-share money is needed to get farmers and landowners to put more practices in place.
“It takes a lot of investment to put conservation and water quality improvements on the land,” says Hill. “Especially to install edge-of-field nutrient reduction practices, such as bioreactors and saturated buffers. We’re talking hundreds of millions of dollars to meet the goals of the Iowa Nutrient Reduction Strategy. Farmers are willing to make a big investment in water quality. But the state needs to step up and invest more in this effort as well.”
Several water-quality funding proposals were floated last year in the Iowa Legislature, including one from Gov. Terry Branstad, but none gained traction. Adding to the push for water quality improvement is the lawsuit filed by the Des Moines Water Works against drainage districts in Buena Vista, Sac and Calhoun counties in northwest Iowa.
A broad coalition of farm, conservation and environmental groups—known as Iowa’s Water & Land Legacy—has been formed to push for raising the state sales tax three-eighths of 1 cent to fund Iowa’s Natural Resources and Outdoor Recreation Trust Fund. That sales tax hike would raise $180 million a year. The trust could provide up to 60% of its funding for water quality efforts, as the rest of the money must go for trails, parks and wildlife habitat. In 2010 63% of Iowans voted to create this trust fund, but lawmakers have failed to fund it.
The No. 1 issue House Republicans say they want to address this session is water quality. House Speaker Linda Upmeyer, R-Clear Lake, says the bill the House passed during the 2016 Legislative session which drew revenue from existing water use taxes and infrastructure dollars, is a good starting point. The House Republican caucus isn’t inclined to raise the state sales tax to fund water quality projects, she says.
Many Democrats in the legislature favor raising money for water quality by passing the three-eighths cent sales tax. Meanwhile, Senate President Jack Whitver, R-Ankeny, says there is support within the Senate Republican majority to address water quality, though not through a sales tax. He wouldn’t speculate what the legislation may look like, but said “water quality will be at the forefront of our conversations.”
Gov. Branstad brought water quality funding into statewide debate in 2016 when he proposed redirecting some of the future revenue growth from the penny sales tax that funds school infrastructure. That idea failed to gain support. Now as he heads to China to become U.S. ambassador, Lt. Gov. Kim Reynolds will become governor and direct priorities and goals as she works with the legislature on issues, including water quality.
Roland Schnell, president of the Iowa Soybean Association, says he is flexible on the best approach to take as a funding source for water quality, as long as a reliable funding stream is established. Iowa Farm Bureau’s Craig Hill agrees.
While cost-share money is very important, it isn’t the only factor needed to make the Iowa Nutrient Reduction Strategy work. “We need to make sure the money is being used efficiently,” says Aaron Heley Lehman, president of Iowa Farmers Union. That means water quality monitoring and measuring of progress in nutrient reduction need to be part of the picture, as well as funding for practices, he says.
“Accountability in spending the cost-share money is going to be important,” adds Lehman. The IFU favors the idea of raising the state sales tax to finance the Natural Resources Trust Fund as a way to help pay for increased water quality efforts.
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