Dave Bartemes

Iowa View contributor

Legislation in the Iowa Senate would repeal the property tax exemption for forests and nut plantations for the assessment year beginning Jan. 1, 2020. A subcommittee voted last month to move the bill to the full Senate Natural Resources and Environmental Committee for consideration.

In 1906, the Iowa Legislature enacted the Forest and Fruit Tree Reserve program to encourage landowners to plant and maintain woodlands and fruit trees in order to re-stock marginal croplands with trees. The original Iowa landscape had been reduced from approximately 12 percent tree cover to less than 2 percent tree cover since the pioneers entered Iowa and utilized the wood to build their farmsteads.

The Forest Reserve program has been successful and today approximately 7 percent of the landscape has been returned to productive forest lands. Senate File 5 preserves the exemption for fruit trees but eliminates the exemption for forests and nut trees.

Iowa woodlands produce some of the best hardwood lumber in the world. The woodlands, principally located on land that is marginal for row-crop production, have revived a timber industry that supports 80 sawmills with a steady supply of high-quality logs. The forestry industry in Iowa has rebounded from almost nothing in 1906 to a $4 billion industry employing more than 15,000 people. If Senate File 5 is passed by both houses of the Iowa Legislature and signed into law by the governor, this vibrant and growing industry is in danger of being lost.

Woodland owners must wait 75 years or more to harvest a crop and during that time they bear the cost of maintenance and care for their woodlands. The property tax exemption reduces the cost of woodland management and gives the tree farmer enough breathing room to see his tree crop through to harvest.

Without the property tax exemption, woodland owners will be forced to remove trees in favor of annual row crops. The effects of this crop conversion would be disastrous for a number of reasons:

Hundreds of businesses would face bankruptcy.

More than 15,000 jobs would be at risk.

Conversion to row crops would further depress commodity prices.

Soil erosion would accelerate.

Water quality would be impaired.

Hunting and fishing industries would be severely curtailed.

Current income from logs exported to Europe and Asia would decline significantly. (Currently just under $1 billion.)

Sen. Amy Sinclair, the bill’s sponsor, argued before the subcommittee that she believed it unfair for county residents to pay their taxes and that woodland owners should do the same. She pointed out that some landowners were from out of state and that some woodland owners were leasing hunting rights on their woodlands even though the law doesn’t permit this.

More than 30 people attended the hearing. Most spoke against the bill as unfair to woodland owners and indicated that the repeal of the exemption was a considerable hardship. Some noted that the state provides tax credits to lure industries into the state or remain in the state, and that woodland owners should have the same type of public support.

Sens. Mark Segebart and Ken Rosenboom voted for the bill and Sen. Rob Hogg voted against the proposal. The bill will move to the full Natural Resources and Environment Committee.

The forestry industry provides good paying jobs ($18 to $25 per hour) that are centered in the rural parts of the state. Our rural counties have experienced loss of jobs and citizens over the past 20 years as young Iowans have been forced to move to high population centers to find employment. It doesn’t make sense for the legislature to end a program that has proven successful and risk the loss of more rural businesses and jobs.

Ending the Forest Reserve program for woodland owners is counterproductive when more people find it necessary to leave their homes, exacerbating the already poor rural job market. When people leave rural communities, property values fall. The result is that rural counties will continue to lose their tax base. On the other hand, continued growth of the forestry industry may be the tonic rural Iowa needs to flourish.

Dave Bartemes is co-chair of the Coalition for Iowa’s Woodlands and Trees.