Iowa Tax Proposals and IWILL

posted on Thursday, February 3, 2022 in Water and Land News

On January 27, Sen. Dawson introduced SSB 3074, the Senate tax bill. The Senate Ways & Means Committee held a subcommittee hearing on the bill on Tuesday, February 1, and this morning (February 3) it passed out of committee with an 11-6 party line vote.

It is a sweeping piece of legislation that makes many changes to the state’s tax system. For example, SSB 3074:  

  • raises the state sales tax, which would finally fund the Natural Resources and Outdoor Recreation Trust (IWILL); 
  • changes the original IWILL formula to be more consistent with Gov. Reynolds’ proposed formula in the 2020 Invest in Iowa Act
  • eliminates the local option sales tax, a tool used by local governments to provide numerous services, and gives a portion of the sales tax increase back to local governments; 
  • funds the Resource Enhancement and Protection (REAP) program through the Trust instead of the general fund; 
  • eliminates the conservation tax credit; 
  • eventually eliminates the state income tax. 

Twelve years ago, Iowans voted in favor of the Natural Resources and Outdoor Recreation Trust Fund, proclaiming their support of a future Iowa that would be resilient, healthy, beautiful, and accessible to the public. Funding the Trust is a top priority for IEC, but the implications of SSB 3074 go far beyond funding IWILL.

IEC is eager to review the bill’s fiscal note to better understand the effects of the above changes. We are also meeting with partners, coalition members, and stakeholders so a more comprehensive understanding of how the bill would impact future funding of programs we care about and how changes from the original formula affect what the proposed version of IWILL is and does.  

IEC is also committed to understanding the environmental justice implications of the bill. IEC recognizes that a sales tax is inherently more regressive than an income tax and disproportionately impacts low-income Iowans. IEC advocates for an equitable, livable future for all Iowans, especially the most vulnerable.

As we continue to gather information on the proposed tax bills and follow their progress through the legislative process, we will welcome input from and provide information to our members, partners, and supporters. 

  1. clean water
  2. iwill
  3. jedi
  4. land stewardship
  5. nutrient reduction strategy
  6. reap
  7. recreation