After two and a half years of negotiations, legislators have tentatively agreed on a plan that will reduce commercial property taxes in Iowa, set a slightly lower limit on future property tax increases for homes and farms, and reduce income taxes as well.
“Part of the reason that we got here this year is because people realized, twice now, that the voters made a choice to keep Democrats in control of the Senate with Republicans in the House and a Republican governor and I think everybody on both sides said, ‘In that case, we ought to work together,'” says Senate Democratic Leader Mike Gronstal of Council Bluffs,” …which is what we did.”
Commercial property tax rates will be cut by 10 percent within three years, a roll-back Republicans sought, and a new tax credit will be created for all commercial property owners, something Democrats proposed.
“We fought long and hard to make sure this bill focused on small businesses in the state of Iowa and we got that in this, so I think this is a victory for small businesses in Iowa who usually when it comes to tax cuts or incentives or all of those kind of things, they’re kind of the last folks who get thought about around here,” Gronstal says.
The Democrats’ call for increasing a tax credit for low-income Iowans is included in the package, as well as a new tax credit of up to $60 a year for Iowa income taxpayers – something Republicans like House Speaker Kraig Paulsen of Hiawatha wanted as a way to deal with unspent or surplus money in the state budget.
“That will return some of the overpayment to Iowans through a mechanism on their income tax forms,” Paulsen says. “It’ll be similar to how you have the Child or Dependent Tax Credits on there. There’ll be another Taxpayer Trust Fund Credit and the taxpayer will just be credited that amount. It’s a very efficient way to handle it.”
The plan also sets a slightly lower, three percent limit on how much assessments on residential and farmland can go up each year. The present limit is four percent. Paulsen says that means the package deals with all classes of property in Iowa.
“I think it met the objectives of the House. It met the objectives of the Senate and met the objectives of the governor,” Paulsen says. “….All parties have something in there…We’re looking forward to passing it and getting it on the governor’s desk.”
The package must first be considered and passed in the Senate, then it can go to the House for debate.
(This story was changed at 6:46 p.m. after sources confirmed the senate would not be voting on the measure this evening.)