An Interview with Iowa Self-Service Laundry Association President Daryl Johnson
An historic bill, sponsored by the Iowa Self-Service Laundry Association, to repeal the existing sales tax on coin-operated laundry in that state recently passed unanimously in the Iowa Senate and (as of press time) was on its way to Gov. Terry Branstad’s desk for his signature.
Iowa laundry owners have been paying nearly 9 percent of their gross sales each year to satisfy this tax. And this victory marks one of the largest legislative wins for the self-service laundry industry in years.
“I couldn’t be happier – or prouder – of our members in Iowa who have had the incredible will and tenacity to see this through,” said Coin Laundry Association President and CEO Brian Wallace. “It’s amazing what a group of like-minded business owners can accomplish. It’s just a monumental legislative victory.”
PlanetLaundry Editor Bob Nieman caught up with ISSLA President Daryl Johnson that day after the bill’s huge victory in the Iowa Senate to discuss how the organization’s grassroots effort was able to turn the tide – and what this legislative win means for laundry owners going forward.
Congratulations on what is no doubt an historic victory for the self-service laundry industry. It was a long time coming, wasn’t it?
Thank you. It was a good day. We had a nice time, but now the adrenaline is starting to wear off. My wife, Lisa, and I are both feeling like we just ran a marathon.
When she and I started this, we essentially re-formed the Iowa CLA affiliate, and the whole point of re-forming the association was to fight this sales tax.
The first time we had a bill introduced in Congress was about five years ago. And, for the first four years, it went nowhere in the Senate. Three years ago, we introduced a bill in the House of Representatives, and it got a little bit of traction – it made it past the House Ways & Means Committee and then died.
However, during this most recent legislative session, the bill sailed through both houses of the state legislature, including a unanimous vote in the Senate.
We made some history in the process, it seems. I was told that there has not been a tax bill passed in the Iowa Senate 50-0 in at least three decades or more, and we also won the vote in the House with a 76-14 margin. Those are just about unprecedented wins. We also got the bill done in one legislative session after hiring a lobbyist – that never happens!
This whole process was a bit of a blur, and it took a ton of work from many more than just me. We had some amazing owners spending a ton of time at the Capitol and digging deep to fund the fight.
We still have some financial needs to replenish our coffers, but all in all we are very excited and exhausted.
Can you explain why this win is so important for laundry owners in Iowa, as well as for the industry in general?
Obviously, for folks in Iowa, it’s a net revenue plus for us. And it wipes out a competitive disadvantage that Iowa laundry owners have had to endure. In fact, I and at least two other operators have built stores in bordering states because of this tax. Competitively, this tax made it very difficult to compete with states that didn’t have it.
Beyond that, it was a problematic tax from a moral standpoint. It was an immoral tax. It was unfair. It was a tax on the poor and on those among us who have the least.
When I look back on the experience, we really worked hard for a lot of years. Why? Why would I do this?
It was simply the moral outrage that it was just wrong – it was wrong for Iowans to be doing this to other Iowans. Overall, that was the driving factor behind this victory.
Of course, the other part of this win is the impact it will have nationally. I hear rumblings that laundry owners in Illinois, Pennsylvania, Kentucky, Connecticut and a couple of states on the West Coast all may be facing sales tax battles in the near future.
Fortunately, owners in Wisconsin won their tax battle last year, and Iowa just repealed its long-standing sales tax this year. Once is a mirage, but twice is a trend.
So, these other states that are considering implementing a sales tax on coin laundry may want to think twice. Things are going in the other direction, and our victories are letting state legislators across the country know they need to back off, because they’re facing on an uphill battle with the laundry industry.
What were the keys to victory this time around?
We built a strong ground game with our local legislators, which was critical. And, during this grassroots process, we were able to pick up two incredibly key legislators as allies for our fight.
Laundry owner Brian DeCoster from Iowa City got together with Sen. Joe Bolkcom, who was in ardent opposition to us. He was the guy who killed our bill in the Senate four years straight. Brian had spoken with him four different times, and all four times the answer was “no.”
Finally, during this last election cycle, Brian called Joe again and asked him to meet at his laundry so that he could show the senator why this issue is so important. Brian walked him through all of the high-efficiency aspects of his operation, the LED lighting and so on. Brian is an incredibly smart operator.
When Bolkcom understood the impact of the tax on laundromats and how laundry owners are truly small-business operators serving the community, Brian was able to change his mind. Joe Bolkcom went from an absolute “no” to an unquestioned “yes.”
My legislator – Rep. Linda Upmeyer, from Clear Lake – also was critically important to our victory. I met with her a couple of times, just after the election. The second time we met at my store, and I did the same thing Brian had done with Bolkcom – I walked her through and explained why repealing the sales tax was such a big deal to us.
Also, we started at the top. After the elections but before the legislative session started – in November and December – we met with the leadership in both the Senate and the House two or three times.
We went right to Sen. Mike Gronstal, the ranking member in the Senate and Rep. Kraig Paulsen, the Speaker of the Iowa House. We had meetings with those guys and told them our bill was coming.
We also talked with another key legislator, Rep. Tom Sands, who is Bolkcom’s counterpart in the House, and he was in our corner. We knew he would support us, because he’s the one who helped push us through the House Ways & Means Committee the last time we got a bill moving in the House. So, he already was an advocate.
Along the way, we also picked up the support of Rep. Josh Byrnes, who actually became our floor manager of the bill in the House. And another key legislator we picked up during the course of this groundswell was Sen. Chaz Allen, who is a Democrat. Scott Creech knew him because Chaz would go to his laundromat to do his own laundry, and Scott would talk with him.
Basically, during the course of talking with these legislators, we picked up the right people and got them on board, which made it easier. We had some champions. The whole point was to find champions – people who not only had the power but who also would buy into what we were doing.
Your efforts really seemed to take off this past legislative session after you hired a lobbyist.
We laid the ground work for four years prior to hiring Larry Blixt, our lobbyist. We covered the ground as well as we could and raised awareness of this issue.
That’s the other unique aspect of this victory. To have hired a lobbyist and passed the bill in the first year, with a very contentious legislature, was a million-to-one shot. I should be playing the lottery. It’s hard to explain how big of a deal that was. We literally had one year to get this done, because we didn’t have the money to hire a lobbyist next year.
I can’t tell you how freaked out I was when we committed to hiring Larry and spending that kind of money. We barely had enough for an upfront down payment to him.
For 14 months – from the time we hired him until this thing was done – there were a lot of sleepless nights. But this issue was critical – and, because it was so critical and because of the impact nationally, we had to have a win.
What should laundry owners take away from this legislative victory in Iowa?
It doesn’t take an army of people. The overwhelming majority of the work was done by about eight or fewer people. We had the right people talk to the right people at the right time.
Truth be told, most of the time it was just two or three of us who were at the state house, talking with lawmakers and getting in their faces, just being present.
Yes, it was definitely a group effort because we had money come in from all over the state. And those $50 and $100 contributions were huge as far as helping us get this done. If it wasn’t for all of the owners in Iowa buying in, we wouldn’t have made it.
However, it was a small group of store owners who decided that this was going to be our baby, and we were going to work it until we got it done; we were going to sacrifice and do whatever it took to get the win.
And to receive that strong of a vote will help us down the road, when the legislators start thinking about taxing laundries again. We’ll be able to point to the vote and to how this legislation passed – and we can say, “Listen, we’ll do this again. Do you really want to go down that path? Drop that sales tax idea and move on to something else.”
What’s the possibility of this sales tax issue coming up again in Iowa, at least in the near future?
Anything is possible. However, based on the projections for the state budget, it looks like we’re going to be OK for a while. For the next four years, they’re fairly confident there will be a surplus in Iowa – so we’ve got a few years. We’re hoping we’re going to get five years out before they even consider coming after us again.
Of course, our concern is that we have the capacity to defend our sales tax exemption as necessary. We want to make sure we have a bit of a war chest to dip into within the next five, 10 or 15 years, whenever the lawmakers decide to come back at it, and they will. There’s no doubt in my mind this will come up again – it’s just a matter of when, because it’s happening everywhere across the nation.
