House-Senate property tax conference committee set

DES MOINES – State lawmakers' road to a property tax relief compromise yet this session got off to a rocky start Monday.

Sen. Joe Bolkcom, D-Iowa City, chairman of the Senate Ways and Means Committee, opened the week by reiterating Senate Democrats' position that any deal to cut taxes must include a boost in the state's earned income tax credit for working families.

Shortly after that, Gov. Terry Branstad unveiled a new online “Residential Relief Calculator” bolstering his administration's desire to place a yearly growth rate cap of 2 percent for all property classes as part of an overall package seeking to ease tax burdens for owners of commercial and industrial properties.

The two developments were part of the posturing that is beginning to build as 10 members of the House and Senate head to the bargaining table as members of a conference committee assigned to hammer out a compromise version of Senate File 295. Those members named to the House-Senate panel on Monday included Democrats Matt McCoy of Des Moines, Bill Dotzler of Waterloo and Bolkcom, and Republican Randy Feenstra of Hull and Bill Dix of Shell Rock from the Senate, and Republicans Tom Sands of Wapello, Steve Olson of DeWitt and Chris Hagenow of Windsor Heights, and Democrats Jo Oldson of Des Moines and Roger Thomas of Elkader from the House.

“This is something that has to be addressed. It hasn't been addressed for the last two years,” Branstad told his weekly news conference. “The Legislature is sometimes slow to act, but now is the time.”

However, Senate Majority Leader Mike Gronstal, D-Council Bluffs, said Branstad continued to send mixed signals by focusing attention on residential property tax rates when the focus of his Condition of the State addresses and budget priorities since taking office in January 2011 has been commercial property tax relief.

“For going on three years now the governor has said the presenting problem is commercial property taxes. I understand today he shifted gears and said the problem is residential property taxes,” Gronstal said. “We've been working with him in good faith on the commercial property tax challenges in Iowa. That's what we've kept our focus on. I'm not sure which one he thinks is more important now.”

Democrats in the Iowa Senate previously 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., while commercial entities would have property values above that threshold taxed at the current 100 percent rate.

The approach favored by the Republican-led House combined 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.

Branstad told reporters Monday he wants permanent property tax relief for businesses, home owners and farmers, but added “I'm willing to consider other things as well” which included boosting the earned income tax credit from 7 percent to 20 percent, a multi-year gas tax increase of up to 10 cents per gallon, and other proposals to reduce Iowans' tax burdens.