Iowa legislative leaders say they'll keep working on property tax compromise

But 'gap' remains between House Republicans, Senate Democrats

Two top lawmakers expressed a willingness Friday to keep working on a property tax relief compromise that could be adopted in special session, but they conceded “a gap” remains between what majority Republicans in the House and majority Democrats in the Senate would accept to lower business tax rates while avoiding a shift of burden to other property classes.

Also, House Speaker Kraig Paulsen, R-Hiawatha, said he expects GOP legislative candidates will hit the 2012 campaign trail with a pledge to provide at least $390 million in income and property tax relief in next year’s legislative session. “Absolutely, I think tax relief will be part of it,” he said. “We believe that money is owed back to them. It’s their money to begin with.”

Both Paulsen and Senate Majority Leader Mike Gronstal, D-Council Bluffs, expressed disappointment they couldn’t resolve differences on how to deliver commercial property tax relief before the Legislature adjourned its 122-day, overtime session on Wednesday. But they said there were other positive, bipartisan agreements that that were significant in the areas of redesigning the state’s delivery system for mental-health services and starting a major reform of Iowa’s education system to bolster student achievement. They made their comments during and after Friday’s taping of Iowa Public Television’s “Iowa Press” show.

Earlier this week, Gov. Terry Branstad said he would consider calling a special legislative session to pass a comprehensive property tax relief package if a satisfactory compromise could be worked out with assurances the votes would be there to provide more equity and relief for owners of commercial and industrial property. The governor indicated that the House bill was “basically the framework” he preferred, but he added there might some “tweaks” that could be made that could still keep the overall package acceptable to him.

Gronstal said sticking points to resolution continue to center around limits that would be put on local governments and a guarantee that up to $140 million in state “backfill” annually would be provided to reimburse cities and counties for tax revenue they would stand to lose when commercial property tax rates were phased down so tax burdens were shifted to homeowners.

“We are completely open to working with the governor,” said Gronstal, who also cautioned it is too early to talk about a special session. “We’ve got room to talk.”

Paulsen said there continues to be pressure to “get it done soon,” but he also conceded partisan differences remain that impede resolution.

“This is something that would be good for Iowans, it would be good for Iowa’s economy, and we’ll continue to see if we can bridge that gap,” he told reporters after the IPTV taping. “ There’s a gap there right now.”

Gronstal agreed with that assessment, but added: “I would say the gap is nowhere near what it was a year ago. We came a long ways. We moved towards them. We have a plan that in every respect is closer to what the governor proposed last year and we didn’t get a single Republican vote for it. I think that’s fairly telling that this was more a political issue than a policy issue.”

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