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Legislators ready to dig in quickly when session resumes

Rod Boshart, CR Gazette –

DES MOINES – Property tax relief, education reform and the condition of Iowa’s National Guard will be major focuses of attention when lawmakers return to the Statehouse Tuesday, Jan. 17, after an extended weekend to observe the Martin Luther King Jr. holiday.

Leaders of the split-control General Assembly said they will waste little time in dissecting the $6.244 billion fiscal 2013 spending plan Gov. Terry Branstad laid out last week, with the joint House-Senate budget subcommittees slated to hold their initial 2012 session meetings on Thursday.

On Wednesday, Maj. Gen. Timothy Orr, the adjutant general of the Iowa National Guard, is slated to deliver the annual Condition of the Guard address to a joint session of the Iowa Legislature in the House chambers. Orr’s remarks will include his analysis of Iowa National Guard readiness, mobilizations, operations and community support.

That same day, the full Senate is expected to debate a $1.3 million supplemental appropriation to provide tuition assistance to returning National Guard members. The proposal would provide tuition assistance for National Guard members attending Iowa regents’ universities, community colleges and accredited private colleges, backers say. Senate File 2007 increase the tuition assistance from $3,186,233 to $4,486,233 to pick up the tuition costs for Guard members enrolled in college this semester.

Last month, the Iowa National Guard announced it planned to reduce the maximum Education Assistance Program award from 90 percent of tuition to 50 percent. That could be a loss of up to $1,300 per semester for students at Iowa’s regents’ universities. The cut was a result of higher than expected enrollment, according to Guard officials. When the cut was announced, the regents’ universities and community college began looking for ways to offset the cut, shifting funds for other budget line items to tuition assistance.

Also this week, a House subcommittee is expected to continue work on a proposal to provide relief to all property owners in Iowa, with a special focus on commercial and industrial property.

Branstad is asking lawmakers to lower commercial property taxes 5 percent annually for the next eight years, while limiting the growth of spending by local governments to inflation and capping tax increases on residential and agricultural property at 2 percent annually as a way to provide broad-based relief while protecting cities, counties and schools from revenue declines.

Under the approach, the state would commit $50 million annually for each of the next three years to help “backfill” the potential loss of property tax revenue for cities, counties and school districts. After that, Branstad aides said, the state commitment would drop to $30 million annually for the next two years as communities grew their tax base from new or expanded business activity and the state eased some mandates on local governments to save money. A trigger would temporarily delay implementation of further 5 percent incremental yearly cuts to commercial property tax rates if local governments experienced gaps in revenue, the governor’s aides said.

Rep. Nick Wagner, R-Marion, said House Republicans favor a slightly different approach that would produce the same result of lowering commercial property taxes to 60 percent of current levels over 14 years by exempting a portion of the taxes levied on a portion of the property’s value.

The bill (House Study Bill 500) does not cover land, buildings only. The measure ties local government spending to the Midwest consumer price index plus any net new growth, according to Wagner’s weekly news letter. “This is not a cut in revenue, but rather aligns budget growth to personal income growth. If local governments want to spend more, they have to take it to a vote of the people,” Wagner’s newsletter noted.

The House approach also calls for the state taking the 87.5 percent school foundation funding to 100 percent over seven years.

Democrats who control the Iowa Senate prefer a more-targeted property tax reduction delivered via a state tax credit. Last session the Senate passed majority Democrats’ plan to provide $200 million — $50 million annually for four years — to ease property tax burdens for small and Main Street businesses without hurting local governments and without tilting benefits too heavily to out-of-state corporations.

Lawmakers also received Branstad’s 156-page education reform bill last week and are expected to begin analyzing what likely will be a major focus of the 2012 session.

“That’s going to take quite a bit of work,” said House Speaker Kraig Paulsen, R-Hiawatha. “Is it going to get a lot of attention? Yes. Is it going to move quickly? I don’t know about that.”

Branstad told The Gazette Editorial Board on Friday, Jan. 13, that work needs to be done to improve how young people learning in Iowa schools. People say the state is doing great in education, Branstad said in that session, but the governor wasn’t buying it. “If you look at the results in the last 20 years, we’ve been stagnant while others have moved ahead,” he said.

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