House committee plans to meld property tax proposals

DES MOINES - The property tax relief ball is in the Senate's court, according to House Ways and Means Committee Chairman Tom Sands.

Or at least it will be as soon as his panel blends Gov. Terry Branstad's commercial property tax relief plan with one offered by the House GOP, said Sands, a Wapello Republican.

As Sands sees it, the House and the Republican governor have tweaked their commercial property tax plans since they were introduced a year ago and now it's up to the Senate to make a move toward a middle ground.

However, Senate Ways and Means Chairman Joe Bolkcom, D-Iowa City, said he thinks senators already staked out the middle ground.

“I think there is common ground around four out of five commercial building owners getting a 40 percent-plus tax cut,” Bolkcom said. The Senate plan won't shift the tax burden on to residential property owners.

Even if the House, Senate and governor can agree on that, there is still a wide gulf, Bolkcom said, because the proposals from the governor and the House Republicans “haven't addressed the fact they would result in an increase in residential property taxes as they lower commercial property taxes.”

“I think we would have trouble getting votes to pass that,” Bolkcom said.

Nor are prospects good for the plans being considered in the House that Bolkcom said would send “tens of millions of dollars to out-of-state corporations.” Walmart, for example, would get a $7 million tax break on its Iowa properties, he said.

“We don't think they need it,” Bolkcom said.

Sands said he thinks the Senate is stuck on Senate File 522, which was approved 46-4 despite GOP criticism. It called for $200 million - $50 million annually for four years - to ease property tax burdens for small and Main Street businesses. When fully funded, it would provide up to $5,300 on an individual property.

The governor's plan would reduce commercial property tax to 60 percent of assessed value through a rollback feature similar to the one that taxes residential property on about half of a home's value. He would “backfill” local government revenue with $240 million in state revenue over several years.

House Republicans have laid out a 14-year phase-in of property tax relief that doesn't backfill local governments, but provides property tax relief by having the state take over 100 percent of the school foundation levy.

Sands, who has had three subcommittee meetings on property tax bills in the first three weeks of the session, plans to blend Branstad's plan with the House GOP plan rather than have competing bills in the House.

“Hopefully, we'll get that done in the very near future,” he said, “but it will take more than the third week of the session.”