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Iowa lawmakers, governor targeting Legislature adjournment next week


This news story was published on April 21, 2012.
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James Q. Lynch, CR Gazette –

Iowa legislative leaders are optimistic they’ll achieve property tax relief legislation before wrapping up the session next week, but are offering few details of a hybrid plan they are negotiating.

“As I understand it, it’s the governor’s and the Senate and now we’re putting our mark on it,” House Speaker Kraig Paulsen, R-Hiawatha, said Thursday.

Gov. Terry Branstad confirmed in an interview the nature it “has many of the aspects we worked for, but it also incorporates some of the aspects of the Senate Democratic plan.”

Although the details have not been agreed upon, the governor was “pretty optimistic” a plan offering both property tax relief and property tax limitations will be approved.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, is more optimistic.

“I’m more confident that I’ve ever been in 30 years that we can get something done on commercial property tax relief,” Gronstal said. “I think we’re much closer probably than a lot of people realize.”

Iowans will have to take their word because the leaders are releasing few details.

Here’s the starting point for the discussion:

Branstad and Republicans want to roll back taxes on commercial property from 100 percent of assessed valuation to 60 percent over eight years – faster for small businesses — while providing state “backfill” payments to cities and counties to make up for some of the commercial property tax money they’d lose as a result of the rollback. They also want to cap tax growth at 2 percent annually for agricultural and residential property.

Democrats favor a state tax credit they say would give four out of five commercial building owners a 40 percent-plus tax cut without shifting the tax burden on to residential property owners or adversely affecting local governments.

Elements of those plans that remain apparently include property tax relief in the neighborhood of $250 million over a period of years as well as reducing local government property tax increases from 4 percent per year to 2 percent per year.

According to Gronstal, the plan maintains Democrats’ priority to target relief to small business rather than larger property owners, such as bog box retailers. But, the leader added, he’s “not holding tight on anything.”

Likewise, Paulsen said his caucus hasn’t committed to anything yet.

“It’s important to us to protect the homeowners and the residential property taxpayers,” he said.

Left unchanged, residential property taxes are expected to increase because they are tied to the value of agricultural property, which is rising because of high productivity and commodity prices in recent years.

Branstad emphasized that the property tax relief might not be everything people had hoped for, but would provide “significant relief from what would happen if they took no action. Taxes would be less than if the Legislature went home again without taking action.

Neither Gronstal nor Paulsen see that happening.

In the past, Gronstal said, “the enemy of getting something done has been people saying, ‘That’s not good enough.’”

This year, an election year, Paulsen said, “there is greater interest in trying to work together.”

“I see fewer ultimatums. I think people are trying to work to solutions,” he said.

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