Rod Boshart, CR Gazette –
JOHNSTON – Senate Majority Leader Mike Gronstal said he hopes Democrats and Republicans can agree to a $250 million commitment for property tax relief as a starting point in reaching consensus on commercial rates.
Gronstal, D-Council Bluffs, said Democrats are willing to commit $250 million as a direct state payment for property tax relief over a period of years. They do not, however, want to provide it as a reimbursement to local governments to help cover revenue lost because of lowering tax rates by 5 percent annually for eight years.
“I’m trying to show a willingness to negotiate,” Gronstal told reporters following Friday’s taping of Iowa Public Television’s “Iowa Press” show.
Gronstal said Gov. Terry Branstad and legislative Republicans have proposed a $560 million reduction in commercial property taxes over the next eight years that would earmark up to $250 million as payments to cities and counties to make up for some of the money they’d lose. That approach, Gronstal fears, will force cities to raise residential rates to offset less tax revenues from businesses.
Democrats prefer to provide relief via a direct commercial property tax credit to Iowa-based small businesses. Their initial offer was to ramp up the state commitment to $200 million over four years, but Gronstal said Friday they would be willing to meet Republicans at $250 million and try to forge agreement on a mechanism to deliver the relief without causing a jump in residential property tax rates.
Rather than face gridlock that could result in no agreement again this session on an issue all parties agree is a top priority, Gronstal said he hoped common ground could be found.
“I think if we can’t take big steps, we ought to take small steps,” he said.
“Often around here the best approach is to take one step. One step usually leads to a second step and then a third step. So let’s take a step this year on the pieces we agree on,” Gronstal said during the taping. “This isn’t Moses and the Ten Commandments. We’re not casting these things in stone. We’re passing one year an effort to relieve commercial property taxes and everybody agrees. People all have to give up something in that equation.”
