Governor Branstad isn’t embracing the plan House Republicans passed last week that would cut commercial and industrial property taxes by 25 percent over the next five years.
“That’s making significant progress,” Branstad says. “But it’s not where we want to end up.”
Nearly a year ago — during the 2010 campaign — Branstad called for a 40 percent reduction in commercial property taxes. Branstad says Iowa is not competitive with surrounding states when it comes to property taxes and the state is losing business development as a result.
“I want to make it clear that my focus is on jobs,” Branstad says.
The Democrat who leads the Senate Appropriations Committee accuses Branstad of making “an 11th hour ultimatum” that could derail efforts to develop a state budget plan before July 1 when the new state fiscal year begins.
The governor also says his fellow Republicans in the House have made an unacceptable decision about one of the state’s economic development initiatives. Branstad says the massive bill House Republicans passed last week would take nearly $13 million set aside for state grants or loans to new or expanding businesses — money that was to be used in the current state budgeting year — and shift that money into next year’s budget.
“There’s some projects that have been approved by economic developmnent (officials) for funding that the money’s deauthorized on and so we’re working to try to make sure that they understand that this is not acceptable,” Branstad says. “We need to have the resources necessary to attract the businesses and the jobs that we need.”
House Republicans voted earlier in the year to end the state’s “Grow Iowa Values Fund” which has been a $50 million annual initiative, handing out state grants and loans to businesses that promise to create jobs in Iowa by building new operations in the state. Branstad has asked for $15 million for a similar program, that will be renamed.
“What we requested is very modest and not nearly as much as the state has spent in the past,” Branstad says. “But we do think that we do need to be able to have some incentive programs.”
The House GOP voted last week to set aside $15 million for state grants and loans to businesses in the coming fiscal year, but $13 million of that is what Branstad says already promised to businesses in the current year. That would leave just $2 million worth of state grants and loans for the Department of Economic Development to divie out in the next 12 months.
Legislators of both parties and the governor’s staff will discuss this and other issues in private meetings this week as negotiators work to strike a final agreement on the state budget.
Listen to Branstad’s weekly news conference (he talked about flood issues during first half; about budget/tax issues in second half): BranstadJune13
(This story was updated with additional information at 11:20 a.m.)
