Senate Democrats are proposing property tax relief that would have greater financial impact on small businesses rather than larger ones.
Under the plan, the property tax rate would be cut in half on a commercial building’s first $30,000 worth of value. That means, for example, the operators of a suburban “big box” store and small, “Main Street” businesses would get the same $600 worth of tax relief. Senator Joe Bolkcom, a Democrat from Iowa City, is chairman of the Senate Ways and Means Committee which drafts tax policy.
“It’d provide significant benefit to those small business owners who are about trying to create jobs in this economy,” Bolkcom says.
In the first year, Senate Democrats would send $50 million in state tax dollars to local governments to cover that tax break. “One of the main concerns that we have with any tax proposal is that we don’t either shift taxes from one taxpayer to another or simply say to local governments…’You’re going to have to do with hundreds of millions of dollars worth of less revenue to provide services and do your work’ and so responsible for us was having a tax relief effort for commercial businesses where…state government picked up the tab,” Bolkcom says.
House Speaker Kraig Paulsen, a Republican from Hiawatha, isn’t endorsing the plan, but he’s not rejecting it either.
“I continue to be excited that we all are talking about things and right now what I’m trying to do is look at that proposal, look at the governor’s proposal and look at our proposal and see where those pieces overlap,” Paulsen says. “I think we’re all interested in doing something, in addressing, in particular, commercial property taxes.”
But Senate Republican Leader Paul McKinley of Chariton scoffs at the size of the Democrats’ six-hundred dollar property tax cut.
“To a company doing several million dollars in business…paying tens of thousands, perhaps hundreds of thousands of dollars in property tax whose making a decision, ‘Where are we going to locate?’ — $600 is not going to make a difference,” McKinley says.
Governor Branstad has proposed a commercial property tax reduction plan of his own that would provide $65 million in property tax relief the first year. Branstad says he’s encouraged by the Democrats’ property tax cut plan.