Iowa Poll: 67 percent want to raise the sales tax for water, mental health

Copyright Des Moines Register & Tribune Co. 2018

Two-thirds of Iowans say they support raising the state sales tax by 1 cent to help pay for a combination of water quality and mental health initiatives, a new Des Moines Register/Mediacom Iowa Poll finds.

Sixty-seven percent of Iowans say they would favor raising the sales tax, and 29 percent say they oppose it. Four percent are unsure.

Poll respondent Christy Shipley, a 53-year-old Clarence resident and political independent, said she believes the state has enough money to properly fund the programs already, but lawmakers don't spend it wisely.

"Since we can’t get them to do it correctly, unfortunately, I would support a 1-cent raise if they promise to get us some mental health care in the state," she said.

Shipley said her son struggled with bipolar disorder and other mental health issues and was "self-medicating."

"I’ve lived this issue," she said. "...The pills that could help him a little bit even were $900 a month at a time when I made barely $900 a month."

Many of her son's mental health issues went untreated, she said, and he ultimately was arrested and currently is incarcerated for assault. Shipley said he's "found a path" while incarcerated, but believes his legal troubles could have been avoided if her family had access to affordable mental health care.

The poll, conducted by Selzer and Co. of Des Moines, questioned 801 Iowa adults Jan. 28-31 and has a margin of error of plus or minus 3.5 percentage points.

The proposal garners majority support among all political affiliations, with the strongest support from Democrats, at 76 percent. Sixty-eight percent of self-identified independents support the plan, as well as 58 percent of Republicans.

Ed Hendley is among those Republicans who support the idea.

Hendley, a 63-year-old Harlan resident and a member of the local chamber of commerce, said he believes the federal government can be overly burdensome when it regulates issues like water quality, and a well-funded local approach could get better results.

On mental health, he said a tax increase could help reduce the overcrowding in mental health facilities that can make it difficult for county sheriffs to find beds for patients.

"They end up transporting a patient from one facility to another, and some of those could be hours away," Hendley said. "And because of the verification system and the reservation system, sometimes a sheriff might make a five-hour trip just to have no bed available. So you know, if we supported more funding for more beds and facilities that are equipped to handle that, we wouldn’t have that issue."

A 2017 Iowa Poll found 56 percent of Iowans supported increasing the state sales tax by three-eighths of 1 cent to pay for water quality projects and outdoor recreation.

Support for raising the sales tax grew to 67 percent this year when the question included using some of the funding for mental health care — an issue that a third of Iowans say has reached a "crisis."

Sherry Pitzen, a 69-year-old retiree who lives north of Hamburg, said she believes mental health care is a critical issue facing the state, but doesn't see water quality that way.

Pitzen, a Republican, said she would oppose raising the sales tax to address either issue, regardless of their importance.

"Any time you're raising the sales tax, you’re really hurting those people with a lower-type income," she said. "I'm just opposed. I think we pay enough as it is.”

Sales taxes generally are considered regressive because they consume a larger percentage of income from people who earn less money. Iowa and other states work to make them less regressive by exempting basic necessities from the sales tax, such as medications and most food purchased at grocery stores.

Forty-five percent of Iowans say they consider the sales tax to be the most fair to taxpayers, judged against state incomes taxes (28 percent) and property taxes (15 percent), the Iowa Poll found. On the flip side, 48 percent of Iowans say property taxes are the least fair, compared with 29 percent for state income taxes and 13 percent for sales taxes.

Those results come as state lawmakers grapple with reforming the state tax code. Republican Gov. Kim Reynolds and legislative leaders in her party say doing so is among their top priorities for the year.

Rep. Guy Vander Linden, chairman of the House tax-writing Ways and Means Committee, said it's possible Republicans will discuss raising the sales tax as part of those conversations.

"I would think the Legislature might think about it," he said. "It would not have the support of the Ways and Means in the House. But it could still happen. I have never voted for a tax increase, and late in my career I can't see that happening. But anything's possible."

Republican leaders are more likely to focus their attention on reforming income taxes for individuals — an issue Reynolds highlighted in her Condition of the State address in January. She called for reducing rates across the board and eliminating a provision of Iowa's tax code known as "federal deductibility."

That provision allows Iowa taxpayers to deduct what they paid in federal income taxes from their state tax liability, which in effect prevents a tax on a tax.

But it also creates an inverse relationship with federal taxes. When federal taxes decrease, Iowans make smaller deductions from their state income tax burden, and the amount they owe in state taxes goes up.

President Donald Trump in December signed into law a major tax cut, which Iowa Department of Revenue officials estimate will reduce Iowans' federal tax burden by about $1.5 billion during the 2018 tax year.

They also estimate Iowans will pay more state income taxes, beginning with about $16 million during the 2018 budget year. That is estimated to rise to $106 million the next year and again to $138 million in the 2020 budget year.

Reynolds and other Republican leaders have been adamant that the money in future years should be returned to taxpayers in the form of tax cuts. But Iowans are split, the Register poll shows.

Forty-four percent agree with Reynolds and say the money should be returned to taxpayers in the form of tax cuts. But 50 percent say it should be used to restore funding that has been cut from state programs in recent years. Six percent are unsure.

Lawmakers continue to grapple with the effects of sluggish revenue growth. For the second year in a row, they will be be forced to make mid-year spending cuts that will affect state programs and services.

About the poll

The Iowa Poll, conducted January 28-31 for The Des Moines Register and Mediacom by Selzer & Co. of Des Moines, is based on telephone interviews with 801 Iowans ages 18 or older. Interviewers with Quantel Research contacted households with randomly selected landline and cell phone numbers supplied by Survey Sampling International. Interviews were administered in English. Responses were adjusted by age and sex to reflect the general population based on recent census data.

Questions based on the sample of 801 Iowa adults have a maximum margin of error of plus or minus 3.5 percentage points. This means that if this survey were repeated using the same questions and the same methodology, 19 times out of 20, the findings would not vary from the true population value by more than plus or minus 3.5 percentage points. Results based on smaller samples of respondents — such as by gender or age — have a larger margin of error.

Republishing the copyright Iowa Poll without credit to The Des Moines Register and Mediacom is prohibited.