Governor-elect Branstad has proposed a tax break on commercial property that has Mason City City Administrator Brent Trout concerned.|In a memo from City Administrator Brent Trout to the Mayor and City Council, Trout outlines his concerns about a tax cut on commercial property that Governor-elect Terry Branstad hopes to implement.
“The discussion related to the proposal by Governor-elect Branstad on reducing commercial property taxes by up to 60% has many in City government concerned about their budgets,” Trout said.
According to the memo, Mason City has $358,863,929 in commercial property valuation in its City limits.
“If we lost 60% of our commercial property tax value we wold lose about 13.8% of our total valuation. The loss in value would be a substantial loss and cause a requirement to make major changes in our operations.”
The 60% tax cut has been reported widely in the media as a reduction of the 100% rate of taxation on commercial property down to 60%, a 40% reduction. To contrast, residential property in Iowa is only taxed at 48% of its value.
Branstad’s proposal would tax new commercial property at 60% of its total value, and phase in a tax cut of roughly 40% existing commercial property. The proposal seems to still be undergoing changes, and Trout says “It appears unlikely that this proposal will succeed in its current form.”
Trout says in the memo that he will continue to monitor the issue.