Nicole Welle | February 15, 2021
GOP members of the Senate Natural Resources and Environment Committee voted last week to advance a bill that would reduce tax breaks for Iowa forest reserves.
Currently, landowners qualify for a 100% tax break on land made up of forests as small as two acres. The new bill would reduce the forest reserve tax break to 75% of the property value, require a minimum of 10 acres to qualify and place a five-year limit on exemptions. GOP senators who introduced the bill argued that it could prevent landowners from cheating the system, but Democrats criticized its timing as Iowa fights chronic water pollution and continues to recover from the derecho that destroyed 25% of the state’s trees last August, according to an Iowa Capital Dispatch article.
Sen. Rob Hogg of Cedar Rapids criticized Republicans for pushing a bill that could interfere with derecho recovery. Lawmakers have made little effort to help landowners recover, and increased taxes would only add to the burden of recovery costs, Hogg said. Sen. Sarah Trone Garriott also opposed the bill, saying that Iowa’s limited forest helps reduce water pollution and supports the state’s wood industry.
Iowa’s woodlands currently support a $4 billion forest industry. Because woodland owners have to wait until a tree is mature enough to cut it down, the tax breaks help alleviate the costs of growing and maintaining their trees in between harvests. Without the current exemption, some woodland owners could be forced to replace some of their trees with row crops. This crop conversion could accelerate soil erosion and increase water pollution in the state, according to the Des Moines Register.
If passed by the Senate, the bill’s language would require the Iowa DNR, rather than the agriculture department, to verify that land qualifies as a reserve. However, the bill does not allocate extra money to the DNR, and the state did not conduct a financial study to estimate the added cost.