House-Senate panel to seek property tax accord

DES MOINES – The Iowa Senate agreed Thursday to send a property tax relief issue to a House-Senate conference committee, marking the farthest point it has progressed in the split-control Legislature and raising hope a compromise could be forged this session.

“That is a very hopeful step,” sais Senate Majority Leader Mike Gronstal, D-Council Bluffs. “That's farther than we've ever gotten before. That's a good sign.”

House Speaker Kraig Paulsen, R-Hiawatha, said he expected the House to follow suit early next week and was optimistic common ground can be reached when five senators and five representatives work with Gov. Terry Branstad's aides to merge the competing approaches.

“I'm looking to find ways to get a solution that serves Iowans. I think that opportunity is going to present itself,” Paulsen said. “I continue to be optimistic that sooner or later we're going to land on something that we can put on the governor's desk and he'll signed and it will make a difference for Iowans.”

The Republican-led House approach combined Gov. Terry Branstad's proposal for rolling back the taxable value of commercial and industrial properties to 80 percent with the House GOP component devoting more state dollars to annual increases in education funding. Additionally, future growth in residential and agricultural tax bills would be limited to 2 percent per year.

As passed by the House, the GOP package was estimated to lower property taxes by nearly $687 million when fully implemented. The state would reimburse local governments about $662 million in overall state revenues to hold them harmless for the potential drop in property tax collections.

Majority Democrats in the Senate approved a $250 million commercial property tax credit targeted at small and Main Street businesses over five years. Backers say the approach would enable all businesses to be taxed at a lower rate on the first $324,000 of their assessed property value. Commercial entities would have property values above that threshold taxed at the current 100 percent rate.

In the past, Gronstal said, “the enemy of the good has been the perfect” in the sense that negotiators took an all-or-nothing approach to providing relief to owners of commercial and industrial property. He hoped the inaction that has spanned three decades would be replaced by a different outcome this year.

“I would suggest that we've got $250 million on the table, that's a pretty significant first step,” he said. “I think it's kind of crazy to walk away from a compromise. We're certainly open to and have repeatedly offered to give something.”