Is there agreement on property tax reform? Lawmakers reluctant to speak openly

Details of a property tax agreement are sketchy, despite claims by parties privy to the discussion that it's nearly a done deal.

According to various reports, the property tax plan, which may be as large as $400 million, if approved by the split-control Legislature, will provide tax relief to commercial property owners and offer some protection – but not necessarily lower taxes -- to residential property owners.

“Property tax is the biggest and most significant part of it, but there are priorities for both the House Republicans and Senate Democrats,” Gov. Terry Branstad said Wednesday at a bill signing.

However, Senate Ways and Means Committee Chairman Joe Bolkcom, D-Iowa City, wouldn't confirm that – or much of anything else.

“I'm not sure what's in it,” Bolkcom said when asked about the income tax part and an increase in the Earned Income Tax Credit that he has insisted on. People are working on property tax relief, he said.

Senate Majority Leader Mike Gronstal, D-Council Bluffs, agreed the parties are close, but declined to talk about what was in the bill.

“We need to finish our discussion in caucus,” Gronstal said, referring to his 26 Senate Democrats. “Until we do that we're not going to talk about it.”

Lawmakers “have the right to hear this from us before it gets rolled out,” added Sen. Matt McCoy, D-Des Moines.

Although property tax relief has been a priority of Democrats, Republicans and the governor, they have been reluctant to meet publicly to discuss it. A conference committee appointed to seek a compromise on Senate File 295 has had what Senate Minority Leader Bill Dix, R-Shell Rock, called two “non-substantive” meetings.

What information about the plan that has emerged sounds very much like the plan that failed to win support last year. The difference, according to Gronstal, is that the bill is in a conference committee this year.

“People never quit this time,” Branstad added. “They stayed with it and, I mean, I think it takes patience and tenacity to get significant things accomplished.”

Based on various reports, the plan may:

• Include a Democratic plan to provide about $125 million in property tax relief through tax credits to commercial property owners.
• Backfill local government budgets for revenue lost by a rollback on commercial property taxes.
• Reclassify apartments and condominiums from commercial to residential providing an immediate property tax reduction of nearly half.
• Limit increases on residential and ag property to no more than 3 percent a year. The limit it 4 percent now.
• Expand the Earned Income Tax Credit for low-income working Iowans from its current 7 percent.
• Include the House GOP plan to return some of the state's $800 million-plus budget surplus – “taxpayer overpayment,” according to Republicans – to Iowans through income tax credits.

It's clear from lawmakers' comments that much of the plan remains subject to negotiations. One Senate Republican said that chamber will vote on it Thursday.

Gronstal didn't confirm that, but did say a deal is “closer than last week.”

In other action Thursday:

--- The $52.7 million Administration and Regulation spending plan that includes $275,000 for the new Public Information Board was approved 89-6 by the House and 26-19 by the Senate.

The budget allows the new board to pay for a director and two other full-time staff. Lawmakers created the board, which had been proposed in in various ways since 2007, last year. The board can fine people or public bodies up to $2,500 for willfully violating the public information laws. This, advocates argued, is an improvement on the state Ombudsman's Office, which had no enforcement powers and the Attorney General's Office which could have a conflict of interest in some cases.

Paying for the board became an issue between the two chambers. House Republicans appropriated $100,000 for the board, while Senate Democrats pushed for closer to $400,000.

Gronstal filed a motion to reconsider, a move not unusual when the Legislature is nearing adjournment.

--- Negotiators working on the education reform bill haven't met for more than two weeks and it appeared that frustration over key points was setting in.

“Sometimes it feels like we're just spinning our wheels,” said state Rep. Ron Jorgensen, R-Sioux City, co-chair of the 10-member bicameral, bipartisan committee working on the education reform package.

Jorgensen said the key sticking points revolve around parent choice and home rule provisions being pushed by House Republicans and teacher evaluation language supported by Senate Democrats.

Still, he believes an agreement can be worked out in the committee, although he wasn't sure when that would be.

His counterpart, state Sen. Herman Quirmbach, D-Ames, brushed off questions about the state of negotiations with a “no comment.”

Gov. Terry Branstad struck a more optimistic tone than either Jorgensen or Quirmbach.

“It's very close. I'm told that it's very, very close and I think there is essentially agreement on most of the big issues and a few minor things to be worked out,” he said. “I'm very optimistic it's going to be approved. I don't think people would work this hard and get this close and then quit.”

--- The Senate voted 27-18 to approve SF 430, the economic development budget that went from the governor's recommendation of nearly $73 million to $41 million in the conference committee report. That's because several items were removed from the budget, Sen. Bill Dotzler, D-Waterloo, explained. Those research and development and economic development dollars were put into a workforce skills and job creation fund at the three regents universities.

Democrats were unable to re-open any of the Iowa Workforce Development offices that have been closed. Dotzler said that the budget protects three of four remaining satellite offices. It gives the governor discretion to close one based on usage. They are in Iowa City, Decorah, Fort Madison and Webster City.

--- The Senate voted 44-1 to give the Legislature's Administrative Rules Review Committee authority to suspend implementation of emergency rules for 70 days.

Senate President Pam Jochum, D-Dubuque, said it would allow lawmakers to assure that rules written to implement laws they passed were consistent with legislative intent.

Approved 98-0 in the House, HF 586 requires a two-thirds vote of the 10-person committee.

--- The Senate also approved HF 641 43-2 to allow the creation of reinvestment district with the approval of the state Economic Development Board. The districts would allow cities to collect certain sales tax and hotel-motel tax revenues.

It passed in the House 87-9.