Little change in Iowa property tax relief debate

Groups remain at odds over cuts; officials optimistic about finding 'common ground'

It appears little has changed since the last time the House Ways & Means Committee took up a property tax relief plan.

The Iowa Chamber Alliance liked Gov. Terry proposal to permanently reduce commercial and industrial property tax values by 20 percent over a four-year period, fully funding local property tax credits and cut by half the current 4 percent cap on property tax growth for residential and agricultural classes.

Iowa Citizens for Community Improvement and the Iowa League of Cities didn’t like it.

And then there is the Senate where the Democratic majority has approved its own version of property tax relief: $250 million, five-year reduction in commercial property taxes targeted to smaller, Iowa-owned businesses.

Still, House Ways & Means Committee Chairman Tom Sands, R-Wapello, was optimistic Feb. 20 lawmakers will find common ground.

“In recent years, we’ve passed several pieces of property tax legislation,” he said. “This represents a concerted effort to address the concerns we’ve heard the last two years and still provide relief going forward.”

Judging from speakers Wednesday, their views haven’t changed since last year when the House and Senate failed to arrive at a compromise.

Ross Grooters, an Iowa CCI member from Pleasant Hill, was skeptical that a 20 percent property tax cut was necessary.

“They don’t help families,” he said. If the Legislature makes property tax cuts, “they should be narrowly focused to benefit small businesses … not major, out-of-state corporations.”

However, Jon Stineman of the Iowa Chamber Alliance that represents the 16 largest communities in the state, called the plan a “solid step in the right direction.”

Alan Kemp of the League of Iowa Cities saw improvement since last year, but not enough that the League will support the proposal. The League appreciates that the plan calls for a 20 percent reduction in property tax values, half the cut proposed last year, that the governor is calling for backfilling local government revenues and protecting protect cities’ debt obligations for tax increment financing projects.

On the other side of the ledger, Kemp said the plan will lead to diminishing revenues for local government and limit increases in property taxes to 2 percent per year, and doesn’t address alternative revenue streams.

Sands has scheduled two more subcommittee hearings at 11:30 Feb. 26 and 11 a.m. March 4 at the Capitol.

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