Senate Democrats have revised their property tax credit proposal, yet another twist in the more than two-year-long statehouse debate over the proper way to reduce commercial property taxes.
Senate Democratic Leader Mike Gronstal of Council Bluffs says their plan was changed to respond to criticism from Republican Governor Terry Branstad and House Republicans.
“They said ours was too small. We’ve increased ours by 25 percent. They said ours didn’t cover land and buildings. It just covered buildings. We said, ‘O.K., we’ll throw land in,’ so we’re trying to be responsive to them,” Gronstal says. “There’s some signs that the House is trying to be responsive to us.”
Republicans have been pressing for a reduction in commercial property tax rates, arguing it’s permanent tax relief and a state tax credit could be revoked. House Speaker Kraig Paulsen of Hiawatha, the top-ranking Republican in the legislature, didn’t immediately reject the Democrats’ revised plan, however.
“If they are digging in and saying it’s only their way or they’re not doing anything, then that’s not helpful,” Paulsen says. “If it is them putting forth a proposal to move the debate and the discussion forward, then it’s moving the debate and the discussion forward and I look forward to reading it and appreciate them putting that on the table.”
At the end of five years, the owners of commercial property in Iowa would be getting 250-million dollars worth of state tax credits under the Democrats’ plan. Democrats seek to target the credit, so it would only apply to the first $324,000 of a property’s value. In other words, a small business in a $100,000 building would get a much bigger proportion of the benefit compared to the owner of a $10 million commercial property, although the owner of that pricier property also would get the break on the first 324-thousand dollars of the property’s value.