Brianne Pfannenstiel, and William Petroski

Des Moines Register

Twelve House Republicans are backing a proposal that would raise the state's sales tax to fund the Natural Resources and Outdoor Trust Fund in a bill they're calling "tax neutral."

Rep. Bobby Kaufmann, a Republican from Wilton and the bill's primary sponsor, said he plans to officially file the bill Tuesday in an effort to get Republicans talking about a sales tax hike, which they generally have opposed. The bill would offset the increase in sales taxes by making cuts to income taxes.

"Now that we have an idea out there and it’s very public, we can start having those conversations," Kaufmann said. "And because it's tax neutral it makes it a much easier conversation to have."

The bill would phase in a three-eighths of one-cent sales tax increase over three years, and it would offset that increase by making equal reductions to income taxes of about $60 million in each of those three years. Fully phased in, it would be about $180 million annually.

Kaufmann said "there's no way" a bill raising the sales tax without those corresponding tax cuts could pass through a Republican majority in either chamber. And it's still unclear whether there's support to advance Kaufmann's proposal.

In 2010, 63 percent of Iowa voters approved a constitutional amendment creating the Iowa Natural Resources and Outdoor Trust Fund to aid water quality, trails and other projects funded through a three-eighths-of-a-percent sales tax increase. So far, legislators have been unwilling to raise the tax.

A February Des Moines Register/Mediacom Iowa Poll found that 56 percent of Iowans said they support increasing the state sales tax to pay for water quality projects and outdoor recreation.

Democrats typically have been supportive of raising the sales tax to support water quality. But because cutting income taxes would have to be "paid for" by reducing or redirecting funding from other efforts, Sen. Joe Bolkcom, D-Iowa City, said he would oppose the measure.

“Taking money away from our local schools and community colleges to pay for water quality improvements is not the way to get the job done," he said. "If we are going to make a greater investment in soil conservation and water quality, you have to come up with new money. You can’t steal it from schools and health care and public safety. The state is effectively broke and we are going to need new sources of revenue, not taking existing revenues to solve this problem."

Sen. Randy Feenstra, R-Hull, chairman of the Iowa Senate’s tax-writing Ways and Means Committee, said he wanted to study the House proposal before making any kind of a comment.

“This is the first I have heard of it,” he said Monday.

Kaufmann said the bill also would require that 60 percent of the money going to the Iowa Natural Resources and Outdoor Trust Fund is to be spent specifically on water quality.

Rep. John Wills, R-Spirit Lake and a water quality coordinator in Dickinson County, called the bill a good starting point as his caucus seeks to suss out whether enough Republicans could support raising the sales tax.

"I kind of take the stance that somebody’s going to do this eventually, so let’s do it and let’s make it ours," he said. "And really, I believe that water quality, these issues are Republican issues. So let’s own these issues."

Wills is among the eleven other Republicans cosponsoring the House bill, along with Reps. Terry Baxter of Garner; Jane Bloomingdale of Northwood; Stan Gustafson of Cumming; Dave Heaton of Mount Pleasant; Ashley Hinson of Marion; Megan Jones of Sioux Rapids; Kevin Koester of Ankeny; Andy McKean of Anamosa; Rob Taylor of West Des Moines; Louis Zumbach of Coggon.