Branstad optimistic on property tax reform, but not education

Gregg Hennigan, CR Gazette –

Gov. Terry Branstad told an Iowa City crowd Thursday that he’s optimistic the Legislature will adjourn within a week and will pass a commercial property tax reform bill.

He also believes funding for higher education will be close to the increases he proposed, rather than the cuts some of his fellow Republicans had pushed.

Branstad is pessimistic, however, that Iowa’s K-12 education system will undergo a major shakeup, which is another of his priorities this legislative session.

“We may make some progress (on education) this year,” the governor said. “If we don’t, we’ll be back pushing for that next year.”

Branstad spoke at an Iowa City Noon Rotary Club meeting at the University Club.

The Legislature is currently working overtime trying to come to agreement on big issues like the budget, education reform and changing the commercial property tax system.

Members of both parties want to decrease the amount of taxes paid by commercial properties, which currently are taxed at 100 percent of their assessed values, compared with about 50 percent for residential properties.

Local governments, which rely heavily on property taxes as a source of revenue, are worried they’ll get short-changed and warn homeowners could see increases to offset the loss from businesses.

Branstad said local governments would be reimbursed $50 million a year for five years, or $250 million. He also said apartments and modular homes would pay the same lower tax rate as residential property, which is another concern of local governments.

The total tax decrease for businesses would be more than $350 million annually, the Associated Press reported.

House Speaker Kraig Paulsen, R-Hiawatha, and Senate Majority Leader Mike Gronstal, D-Council Bluffs, have a tentative agreement that should move in the House on Monday, Branstad said.

“This has been a 30-year process, but we’re optimistic that’s going to happen,” he said.

On higher education funding, Branstad said he thinks the Legislature will agree to terms close to his recommendation of a $20 million increase for regent institutions and $4 million in additional money for community colleges next year.

Initially, Senate Democrats sought a $34 million increase for the three regent universities, while House Republicans proposed a $31 million cut

Responding to a question from the audience, the governor said he believes Mitt Romney, the presumed GOP presidential nominee, will defeat President Barack Obama in Iowa, which is a battleground state critical in the fall’s presidential election. He said he doesn’t believe Obama has lived up to a promise to bring people together.

“Instead he’s been a very divisive figure, and he spends his time attacking people,” Branstad said.