Special session on property tax relief possible, Branstad says

Gov. Terry Branstad said Thursday he would consider calling a special legislative session to pass a comprehensive property tax relief package if a satisfactory compromise could be worked out with assurances the votes would be there to pass it once lawmakers returned to the Capitol.

Branstad, Republicans who control the House and Democrats who lead the Senate all expressed disappointment and frustration Wednesday that the regular 122-day session ended without an agreement on everyone's top priority to provide more equity and relief for owners of commercial and industrial property.

Lawmakers left town with a lot of political finger-pointing taking place over who was to blame for a second session of inactivity on the property tax relief effort, but leaders of both parties and Branstad indicated there still could be hope for resolution this year if a deal can be worked out that might bring them back for a special session.

“If the Senate leadership comes to me and says they have support to pass the bipartisan compromise that passed the House, I'm willing to bring them back,” Branstad told reporters Thursday. “But I want assurance that they have the votes to do it. I don't want to call them back unless we feel confident they have the votes and that they're going to come in and do it.

“Otherwise, if we call them back and it costs the taxpayers money and we wouldn't get something done -- I've seen that happen before, too,” he said. “If the Senate decides they want to get serious about this and they come to me and tell me they have the votes to pass permanent, property tax relief along the lines that we've been discussing, I'm willing to call them back to do it.”

Branstad indicated that the bill that passed the House on a bipartisan 71-26 was “basically the framework” that he would accept, but he added there might some “tweaks” that could be made that could still keep the overall package acceptable to him.

Senate Democratic Leader Mike Gronstal, D-Council Bluffs, said sticking points to resolution centered around limits that would be put on local governments and guaranteeing up to $140 million in state “backfill” annually to help them deal with lost revenue when commercial property taxes were phased down.

“I want it reimbursed permanently, otherwise the Legislature can choose in a few years not to fund it,” Gronstal said. Without that guarantee and the state under funds its commitment to local governments, the result would be a direct tax shift to residential property owners – which he said would be an unacceptable outcome.

Branstad said he was concerned that Senate Democrats appeared interested in protecting local governments, while he and legislative Republicans place their priority on protecting taxpayers.

“The Senate, well, they couldn't even pass their own proposal, so they just seem don't to have the commitment to property tax relief that Iowans are looking for,” Branstad told reporters Thursday. “I think that tells us we need a new, Republican majority in the Senate to get this done.”

Gronstal said he became concerned in recent days that the GOP approach had shifted away from trying to find a policy compromise in favor of a 2012 election strategy. When the property tax issue came up for debate in the Senate, majority Democrats lacked the votes to pass their preferred approach and minority Republicans fell short of getting support for the House-passed plan.

“I think they chose at the start of this week – instead of trying to pursue a historic opportunity to get a $350 million, 25 percent reduction in commercial property taxes, I think they decide it's better to use it as a political issue than get something accomplished. I think that's the judgment they made,” he said.

Branstad said any deal reached to bring lawmakers back for a special session vote would have to mirror the “framework” negotiators tentatively agreed to in April.