The governor's message

The Gazette Editorial Board

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Gov. Terry Branstad's Condition of the State message on Tuesday hit on two of the biggest issues for most Iowans: improving education and boosting our economy's ability to provide more jobs and increased incomes for households.

His budget proposal calls for a 3.8 percent increase in spending, which seems reasonable overall when considering the state's improving financial condition and critical needs such as investing in the mental health system redesign and meeting Medicaid demands.

As we've said previously, the governor's recently announced education reform plan is a good start. Iowa's students, farmers, business owners and employees must become more competitive in an increasingly challenging global economy, and education plays a huge role.

But we are leery about parts of the governor's economic and job growth plan. The major concern involves his renewed effort to reduce commercial property taxes.

Iowa has one of the nation's highest rates. We understand the need to make it less burdensome, especially for small businesses, which provide most of the job growth. Branstad wants to reduce the commercial rate by 40 percent over eight years.

However, he also wants to limit growth in other property tax rates, such as residential, to 2 percent - half the current state limit - and tell local governments they can't increase spending any more than the rate of inflation. He proposes state assistance to help cover some of the revenue loss.

But we see a large red flag. Why should the state dictate so much of local property tax policy? If people in a community or other jurisdiction think their tax rates are too high, they can confront local policy makers - and hammer the message home in local elections for city council and county supervisor seats.

Instead, the governor's plan takes a mandated one-size-fits-all approach. It may be reasonable in one jurisdiction but not another. Local needs and financial conditions can vary.

Local jurisdictions also have fewer revenue tools - primarily, property taxes and local-option sales tax - than does the state.

So, legislators, keep in mind the folks back home. Find a way to reform commercial property taxes, as the governor urges. But don't seriously damage the ability of local governments to provide basic public services that Iowans expect.

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