Internet and cigarette taxes pitched to fund economic development

It appears more likely that Iowans will see a hike in the state cigarette tax or a new tax on Internet sales — or both — but there’s a catch. A group of Republican and Democrat Senators gathered this morning to say they prefer an increase in the cigarette tax to bankroll a huge new state economic development fund. But Senator Jeff Lamberti, a republican from Ankeny, says either tax increase can pass the Senate.Lamberti says there may be issues to work through as to which option to go with, but they’re at least down to a couple that “can work.” The catch, though, is that Republicans in the Senate insist that a tax reform bill pass the legislature first. Lamberti says tax reform is ranked as the Republicans’ number one item for “growing” the state’s economy. Senate Democrat Leader Mike Gronstal of Council Bluffs says Republicans shouldn’t try to tie the issues together. Senator Thurman Gaskill, a republican from Corwith, says time’s running out to make a decision since lawmakers want to adjourn for the year by the end of the month.Senator Bill Dotzler, a democrat from Waterloo, has been working behind the scenes on the economic development plan that would see the state handing out nearly 900-million dollars to businesses and schools to promote growth. Dotzler says when people work together in a “bipartisan manner” they can come up with good policy.