Use tax policies to reward conservation

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This article first appeared in INHF's Fall 2007 magazine.

Raleigh Buckmaster

Donated conservation easements have protected some of Iowa’s most striking landscapes—including this distinct bluff along the Mississippi River (right) and the native shoreline on Clear Lake (below). Better tax incentives will encourage more Iowans to protect our natural treasures.

 By Duane Sand

Iowa’s growing economy puts relentless pressure on our natural heritage by way of urban growth, more rural homes and habitat converted to row crop production. According to the Iowa Wildlife Action Plan, “One-third of Iowa’s wildlife species is listed in need of immediate conservation to reverse declining trends….The greatest stresses impacting Iowa’s wildlife today all stem from human decisions about land use.”

Though economic growth raises tax revenues, relatively little of that new money goes to conservation. Iowa’s most beautiful lands and critical habitats are rapidly inflating in price, thus constantly eroding the buying power of conservation budgets. It is time to supplement conservation efforts with bigger appropriations, but also with tax incentives.

Why incentives?

Iowans strongly support conservation tax incentives. According to a recent poll, 74 percent of Iowa adults support offering tax credits to landowners who permanently set aside lands to prevent erosion and protect Iowa streams, lakes and wildlife.

We know that Iowa’s existing tax deductions help to motivate land protection. INHF land donors have averaged $4.7 million of donated land value per year in recent years. However, experience from other states show a 3- to 4-fold increase in giving by offering state income tax credits rather than deductions.

A modest proposal

INHF advocates a tax credit equal to 50 percent of the fair market value of land contributions to a qualified conservation agency or organization. The combination of state income tax credit and federal income tax deduction motivates much more protection, especially with permanent conservation agreements. Philanthropy increases among “land rich but cash poor” middle income families, provided increased tax credits can be carried forward for up to 20 years. With farm values and incomes up substantially, tax credits will encourage more people to leave a conservation legacy by protecting the land they love.

The Iowa Senate unanimously passed this policy change last session, and the House Ways and Means Committee supported it as well. Please urge your representatives and Governor Culver to complete this unfinished business and to enact H.F. 902 or S.F. 589 early in the 2008 General Assembly. Ask them to help preserve for future generations many of the special places that have enriched the lives of this and previous generations.

Duane Sand is a public policy consultant for INHF and other organizations.

INHF thanks Representatives Marcie Frevert and Paul Shomshor, and Senators Joe Bolkcom and Michael Connolly for sponsoring tax credits in the 2007 legislature.

Senator Charles Grassley has provided outstanding leadership in the U.S. Senate by co-sponsoring successful income tax credits legislation to benefit protection of endangered species habitat and alternatives for Conservation Reserve and Wetlands Reserve Program contracts.

For more information, e-mail Cathy Engstrom, Director of Communications, or call (515) 288-1846.