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State lawmakers face taxing issues this week

Rod Boshart, CR Gazette –

DES MOINES — Iowa lawmakers face a tax-policy trifecta when they return to the Statehouse this week.

On Tuesday, Republicans who control the House plan to debate their version of property tax reform, while across the rotunda members of the Democrat-led Senate will be considering an expanded tax break for working families.

And as early as today, a House subcommittee is expected to take up a measure designed to raise the state tax on a gallon of gasoline by at least eight cents by Jan. 1, 2014. A Senate panel last week approved a bill that included a phased-in 10-cent increase — five cents a gallon on Jan. 1, 2013, and another five cents a year later. The proposals aim to address a projected $215 million yearly shortfall in money needed to meet the state’s most pressing road and bridge deficiencies.

Other issues that could get attention this week include measures to reform the state’s tax increment financing system, mental health redesign, and expanded efforts to make state government more efficient and less costly. The next two weeks likely will see a flurry of subcommittee and committee activity, because this session’s accelerated timetable means Feb. 24 is the first “funnel” deadline for non-money bills to clear a standing committee to remain eligible for consideration this year.

Sen. Jeff Danielson, D-Waterloo, said the government efficiency proposals that will get House and Senate looks this week are intended to carry on efforts started in 2010 to streamline operations. He also said he expects to receive a draft of legislation establishing regulatory perimeters for state-licensed casinos to offer legalized poker to adult players via smartphones, laptops or other Internet-linked devices.

A bill stalled in the Senate last year that sought to authorize the creation and regulation of an intrastate online poker network to combat games being offered to Iowans illegally via offshore operations. Iowa lawmakers are under increased pressure to bring the activity under state regulation, for two reasons: last year’s federal crackdown on major illegal offshore poker operations, and a separate Justice Department opinion that narrowed prohibitions for forms of Internet gambling to primarily sports betting. But the issue likely faces long odds for approval again this year.

“It’s hard to tell,” said Senate Majority Leader Mike Gronstal, D-Council Bluffs.

“We have this messy circumstance where there’s this gray market or black market online poker business going on,” he said. “I think it’s something worth exploring. I think there’s a lot of potential side tracks for this bill to go down. But I think it probably makes sense for us to try to regulate this industry that’s already going on.”

House Speaker Kraig Paulsen, R-Hiawatha, said the major focus of House members this week will be Tuesday’s floor action on a compromise worked out with Gov. Terry Branstad to reduce commercial property tax rates by 40 percent over an eight-year period.

Republicans who hold a 60-40 House edge also are expected to debate Branstad’s proposal to provide an incentive, via employee stock ownership plans, aimed at keeping successful Iowa-based businesses for leaving the state after an ownership change. House File 2085 is meant to encourage the sale of small Iowa businesses to their employees to prevent the companies from being taken over by out-of-state owners who might move the operations out of state.

On the Senate side, Democrats who hold a 26-24 majority plan Tuesday to debate a $25 million plan to raise the state’s 7 percent earned income tax credit to 13 percent of the federal tax credit for the 2012 tax year for working poor families earning $45,000 a year or less.

Also this week, appropriation subcommittees are expected to begin approving budget measures based on competing GOP and Democratic spending targets that are more than $100 million apart.

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