Iowa House, Senate plod toward adjournment

Education reform compromise slows, snag hits property tax relief movement

The legislative pace at the Capitol has slowed considerably as Democrats and Republicans narrow their work load to a dwindling number of priority bills they must do before they adjourn their 2013 session.

Hope for hammering out an education reform compromise this week appeared to be evaporating Wednesday while House and Senate leaders hit a snag in their plans to move a property tax relief measure to conference committee.

Gov. Terry Branstad said the education reform and property tax relief issues and their long-term cost implications have to be resolved before he and the split-control Legislature can establish a big-picture spending target for the fiscal 2014 and 2015 spending plans. He also said progress has been elusive on the session’s major health-care initiative.

“Those are not going to be easy, but I think they can be accomplished,” the governor said.

“I honestly believe it can be done in the month of May, but it’s going to take a lot of hard work to get it done,” added Branstad on the session’s 101st calendar day. “I believe it all can happen here in the next three or four weeks.”

Senate Majority Leader Mike Gronstal, D-Council Bluffs, said negotiators on the education reform conference committee “are exploring their differences and looking for ways to accommodate each other.” But he expressed frustration with House Republicans for significantly expanding the Senate’s property tax bill and adding an income tax cut that made it a $1.1 billion “political document” that has stalled progress.

“I understand it’s fun to pass political documents and see what the other chamber does with them, but this would not meet any of the governor’s five-year projection kinds of tests, it wouldn’t balance the House budget in the year two or three, so I’m a little frustrated,” he said. “But that said, we’re working on a strategy to negotiate our differences – whether that’s in the form of a conference committee or not still remains to be seen.”

House Majority Leader Linda Upmeyer, R-Garner, said she remained optimistic about the prospects for passing a property tax compromise, but she expressed concern that the delay in finalizing the education reform and funding issues was causing “real uncertainty in schools.”

Branstad shared that concern, but held out hope that differences over education reform “are becoming smaller and consequently I think there’s reason to be optimistic that it can be resolved in the very near future. I know there are behind-the-scenes discussions going on and a lot of times it’s darkest before it turns. I’m still hopeful this can get accomplished.”

May 3 marks the 2013 session’s 110th calendar day and the last day that legislators receive daily expense money – a marker that sometimes hastens the march to adjournment. But Gronstal downplayed that milestone, saying “our job is to stay here until the job gets done.”

“There is much to be done before we’re finished with this session and I think it’s all moving forward in a very systematic way,” added Upmeyer. “So, things are moving and I don’t know that one thing depends on another necessarily. We’re making progress.”

In a related development Wednesday, researchers with the Iowa Fiscal Partnership issued a report assessing the financial effects of the competing property tax plans supported by the GOP-led Iowa House and Democrats who control the Iowa Senate.

“The biggest justification for either plan is political — not based on any inherent economic need to reduce commercial property taxes,” said Peter Fisher, research director of the Iowa City-based Iowa Policy Project and co-author of the property tax policy brief.

According to researchers, “big-box stores” like Wal-mart benefit disproportionately in the House bill, while the Senate bill favors small businesses with lower-valued properties.

A business with less than $622,500 valuation in property would receive a bigger break with the Senate bill — up to 42.8 percent — while larger businesses would receive a greater reduction under the House bill, according to the researchers. When fully phased in by fiscal 2009, the House bill would reduce all businesses’ tax payments by 22.2 percent.

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