Iowa legislators see property tax relief as priority, but can't agree on framework

Deal possible, session opens Jan. 14

DES MOINES – After tamping down expectations for what might be accomplished during the 2013 legislative session, House Minority Leader Kevin McCarthy told a Des Moines business group that “the deal is there to be cut” on property tax relief.

“You can see it,” the Des Moines Democrat told the Greater Des Moines Partnership Dec. 5, “if we’re all ready to compromise.”

His fellow leaders of the split control Legislature seemed to agree for the most part that a deal on property tax relief is possible in the session that opens Jan. 14.

“Commercial property tax will be at the top of the agenda again,” newly elected Senate President Pam Jochum, D-Dubuque, told the partnership, which focuses on economic and community development. Jochum was one of the senators who put together a property tax relief plan that received 46 votes –including 20 from the Republican minority. However, no deal could be struck with the Republican-controlled House.

She offered Dubuque as a model of the give-and-take that will be necessary to strike a deal.

“Our community has prospered tremendously because we had to come together,” she said. “We had to set aside all of our turf fights. We had to bring the business community, government and the public sector together to start working as one. And it worked.”

She called for lawmakers to agree on principles that would set the framework for property tax reform. Her principles would include holding harmless local governments that rely on property tax revenue and making sure the changes are sustainable and “the greatest benefit ought to at least start with Main Street small businesses.”

However, House Speaker Kraig Paulsen, R-Hiawatha, won’t commit to protecting local government’s projected revenue growth.

“Iowans expect government to be as efficient and effective as possible,” so cities and counties ought to expect that, like the state, they will have to reduce their costs, Paulsen said. Protecting cities and counties from seeing revenue go backwards is “probably a discussable subject,” he added.

Also, the GOP property tax reform proposals are broader than the Democratic plans in that they would offer relief to owners of all classes of property – commercial and industrial, ag land and residential.

There is consensus that property tax relief can’t come at the expense of other taxpayers, said Senate Minority Leader Bill Dix, R-Shell Rock.

“I think most people who are paying property taxes expect it gets reduced and not just offset by another tax,” Dix said.

When the state decides to use Iowans’ income and sales taxes to reduce property taxes, it becomes a built-in expense that competes with other line items and rarely rates as high as Medicaid, education and “keeping our prison doors closed,” Dix said.

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