The Iowa Senate passed a tax cut bill Thursday, one day after the House approved an across the board cut in income taxes. The Senate Democrats’ bill favors Iowa’s lowest income families and would cost around $200 million over two years.

Senator Pam Jochum, a Democrat from Dubuque, calls it a jobs creation tax cut. “It helps working families and gives businesses investing in Iowa an immediate economic boost,” Jochum said. The stage is now set for intense negotiations. The House measure would reduce personal income taxes by $700 million a year.

Jochum believes the Senate bill would do more to boost local economies. “And it’s affordable,” Jochum added. She claims the House plan is so costly it will put schools on a “starvation diet.” Republican House Speaker Kraig Paulsen says he hasn’t studied the Senate bill yet, but he expects the divided legislature will cut taxes.

“We think that’s part of the recipe that puts Iowans back to work,” Paulsen said. Senate Democratic leader Mike Gronstal of Council Bluffs wouldn’t speculate on what the two sides might settle on. “The house is going to put a set of recommendations in our world and we’re going to put a set of recommendations in their world. To speculate about what’s fodder for compromise…it’s too early to tell,” Gronstal said.

The Senate also set the stage for tough talks on state-funded pre-school. Democrats approved a measure to keep the state’s $71 million universal preschool program, which both the governor and the House oppose.