Property tax reform in doubt in Legislature

UPDATED: DES MOINES – Iowa lawmakers have begun their march to adjournment today as they finalize a $5.999 billion budget for the fiscal year that begins Friday, but a session-long effort to find a property tax reform compromise appears to be in doubt.

Top leaders of the split-control Legislature say they have finished most of the work on a new spending plan that will span the next two budget years as Gov. Terry Branstad has demanded. The governor and GOP lawmakers want to provide tax relief for commercial property owners, as well as setting 2 percent growth caps on agricultural and residential property classes and limits of spending growth by local governments.

Democrats who control the Senate say they passed a bipartisan plan to provide $50 million in yearly tax credits to ease property tax burdens for small and Main Street businesses without hurting local governments, but Branstad and legislative Republicans are insisting on an approach to phase down rates from 100 percent of assessed value to at 75 percent that Democrats believe tilts benefits too heavily to out-of-state corporations.

“I've put an offer on the table, they've not responded,” said Senate Majority Leader Mike Gronstal, D-Council Bluffs. “If their plans are to put some money out to Wall Street to bail out some big corporations, we're not going down that road.”

A House-Senate conference committee stripped out property tax language today before completing its work, which could signal the issue will be left behind on the march to adjournment unless the governor and legislative leaders work out a compromise yet today.

“It's not an issue that's going away. There's a commitment to deal with this issue,” said Sen. Pam Jochum, D-Dubuque, who suggested a House-Senate panel of Ways and Means Committee members be convened to seek middle ground. She noted that lawmakers will be back at the Capitol in a little over six months due to this year's overtime work which has spanned 171 days – well past the expected 110-day session.

Senate GOP Leader Paul McKinley of Chariton said he is not willing to declare the issue dead today, but he would not rule out Branstad calling lawmakers back into special session yet this year if no immediate resolution can be reached.

“I wouldn't rule anything out,” he said. “People will not stand for property taxes to continue to go up. We will see property taxes dramatically increase and we know where to affix the blame.”

Sen. Joe Bolkcom, D-Iowa City, chairman of the Senate Ways and Means Committee, said many residential property owners were concerned the GOP reform plan would shift the tax burden to them.

“We've been willing to make our plan more robust and we haven't seen much movement from the governor on that. He continues to be in favor of his plan and only his plan. The problem with his plan is that it doesn't provide as much tax relief to commercial property taxpayers as the one that the Senate passed in a bipartisan way,” Bolkcom said. “I hope there's still some opportunity to see this happen, but I would say that the chances of this coming to completion here, given the fact that we can't seem to get any compromise from the governor on this, is slipping away.”

Another issue threatening to hold up adjournment today is a partisan dispute over Medicaid-funded abortions. Republicans on a House-Senate conference committee sought to change the policy at the University of Iowa Hospitals & Clinics in Iowa City to only allow publicly financed procedures to terminate a pregnancy in cases where the mother's life is in danger. Current law that has been in effect for more than three decades provides additional exceptions for rape, incest, miscarriage and fetal deformities, and majority Senate Democrats favor keeping that approach in effect.

House Republicans are discussing compromise language that would establish an appropriate standard of care whereby a pregnant woman could undergo an ultrasound and receive "informed consent" material to better understand all the options that include adoption, carrying the pregnancy to term and terminating the pregnancy. Otherwise, Iowa's current law governing Medicaid-funded abortions would not change.

House and Senate members are expected to vote later today on the remaining budget measures and, in a late development, there's a possibility senators may consider a House-passed measure that seeks to ease hurdles for MidAmerican Energy should the utility decide to build a nuclear-powered facility in Iowa before the session ends.