July 29, 2014

No progress in property tax negotiations

It appears Republicans and Democrats are no closer to agreeing on property tax reform than they were a year ago. 

Legislators negotiated for nearly six months before giving up on a deal in June of last year. There’s been no measurable progress so far this year.

House Republicans are poised to ratify their own plan next week. It would roll back commercial property tax rates by 40 percent over the next eight years. Senate Democratic Leader Mike Gronstal continues to say that’s unacceptable to Democrats, as it cuts commercial property taxes by $560 million, while sending cities and counties $240 million in state tax money to make up for part of those losses.

“So the net tax shift it creates is $310 million dollars on residential properties,” Gronstal says. “That’s the biggest tax shift in the history of the state.”

House Speaker Kraig Paulsen, a Republican from Hiawatha, bristles at Gronstal’s calculation.

“That does not even come close to representing the truth of the matter,” Paulsen says.

According to Paulsen, cities and counties should see growth in property tax collections as Republicans argue their property tax cut will stimulate business expansion and job creation.