Hubbell: Iowa property tax law isn’t working

Democratic gubernatorial candidate Fred Hubbell, a director for the Macerich real estate investment firm that was a big beneficiary of Iowa's 2013 property tax reforms, said Wednesday the law isn't changing the way the shopping mall owner operates in the state and ought to undergo a major overhaul.

Hubbell is one of seven Democrats so far running for governor. Although others also have been critical of state tax breaks for businesses, his position on the board of one of the country's largest mall operators, which owns NorthPark Mall in Davenport and Southridge Mall in Des Moines, offers a different perspective.

Hubbell said Wednesday he had spoken to the chief executive of the Santa Monica, Calif., company and that the 2013 law is a 'nonevent.”

'He's been clear about it, that Macerich never expected to get this benefit, they never asked for the benefit. It's just not made any changes whatsoever in their plans for those malls, in terms of hiring people or reinvesting in the malls,” Hubbell said.

Hubbell said he would overhaul the property tax law, although he did not specify which pieces of the wide-ranging regulations would be retained or jettisoned.

The 2013 law, which passed with support from Republicans and Democrats, includes a 10 percent assessment rollback for commercial and industrial properties, a business tax credit, a limitation on the growth in agricultural and residential property values and a phased-in reduction for apartment buildings and other multi-residential properties.

Proponents of the law defend its impact, but critics say it has failed to deliver on its promises for promoting a better business climate.

In a special report published Sunday, The Gazette revealed legislators are considering phasing out or eliminating the millions worth of compensation the state provides local governments to cope with the loss of property taxes.

Gov. Kim Reynolds, the article reported, wants to honor the backfill commitment in the near term but added that 'we can't be afraid of putting everything on the table as we move forward” in making comprehensive overhauls to Iowa's tax structure.

Hubbell warned Wednesday that failing to reimburse local governments puts more burden on local taxpayers.

Hubbell stepped in to lead the Iowa Department of Economic Development in 2009 in the aftermath of a film tax credit scandal, which involved mismanagement of funds and led to some criminal charges.

Hubbell also said Wednesday the 2013 law and tax deals, such as the recent Apple assistance package, are reminiscent of the film tax credit scandal in that too little thought is being given to approving incentives, the state is losing money and isn't achieving its goals.