A two and a half year logjam has broken at the statehouse and the Iowa Senate has overwhelmingly approved a plan that cuts commercial property taxes and includes proposals to reduce income taxes.
Senator Matt McCoy, a Democrat from Des Moines, was among the 43 Democrats and Republicans who voted for the plan.
“The Iowa legislature demonstrates today that compromise is not a dirty word,” McCoy said.
The compromise includes the Republican-favored approach of rolling back commercial property tax rates by 10 percent over the next two years, along with a new tax credit for commercial property owners that McCoy and other Democrats wanted.
“Two-thirds of small businesses in Iowa are going to see at least a 39 percent reduction in their taxes,” McCoy said.
Senator Rob Hogg of Cedar Rapids was one of six Democrats who voted against the plan.
“Just because it’s a compromise doesn’t mean it’s a good compromise,” Hogg said.
Hogg argued the plan cuts taxes too much and will hamstring the ability of state and local governments to meet the needs of Iowans.
“I want to know state troopers are going to be there to help me. I want to know my prison guards are safe and we’re going to prevent escapes,” Hogg said. “I want to know that we have a children’s welfare system that works. I want to know that people with mental health conditions are getting treatment that they need.”
Hogg was the only opponent in the senate to voice his objections. Senator Randy Feenstra, a Republican from Hull, said 1979 was the last time Iowa lawmakers took significant steps to reduce commercial property taxes.
‘We’re giving money back to our businesses,” Feenstra said. “We’re giving money back to our individual citizens and they can use that money to create jobs, to stimulate the economy, to stimulate our Main Street.”
The bill will next be considered by the Republican-led House, where it is expected to pass. Republican Governor Terry Branstad said last week he will “absolutely” sign the plan into law once it reaches his desk. Branstad this afternoon called Senate passage of the package a “milestone” that had been “a long time coming.”
“(I’m) very pleased to see a property tax reduction bill approved,” Branstad told Radio Iowa. “A good vote – a good, solid, bipartisan majority.”
The bill passed the Senate on a 43 to six vote. The Republican-led Iowa House is expected to endorse the plan soon.
“So far things seem to be lining up to get education reform and also our new Iowa Health and Wellness Plan approved,” Branstad said. “And we feel good about all of ’em and I really think it’s going to move Iowa forward in a positive way, so I think it could be a landmark session.”
A tentative compromise has been hashed out on how to cover up to 150,000 low income Iowans who don’t have health insurance.
The legislation the deals with tax issues creates a new Taxpayer Trust Fund state tax credit that will be worth up to $60 this year. It also increases an income tax credit that benefits low-income Iowans.
AUDIO of senate debate of SF295 conference committee report, runs 27:58
(This story was updated at 3 p.m. with additional information)