An Iowa State University economist says reducing property taxes for Iowa businesses won’t immediately prompt those businesses to hire more workers. Economist David Swenson says most business owners rate an improved tax climate as the sixth or seventh most important reason for hiring.
“It slightly improves your bottom line. It slightly enhances Iowa’s, perhaps, perception as a business-friendly state,” Swenson says. “But to think about it in terms of a forumula — X amount of tax cuts equals Y amount of job gains — never works.” However, Swenson says Iowa policymakers should do something to make Iowa’s property tax system more fair.
Homeowners and people who own farmland pay significantly less in property taxes compared to those who own business or commercial property. An effort to provide some relief to business and commercial property owners stalled in the 2011 legislative session, but the governor and legislators of both parties say the issue is back on their agenda for 2012.
Larry Countryman, the chief financial officer for The Wilson Trailer Company in Sioux City, says Iowa policymakers have to do something to ease the property tax burden on businesses. “We can’t continue to just shift taxes on the commercial and industrial (property owners) and expect people to come here and locate and build plants and do business here,” Countryman says.
Wilson Trailer has its headquarters and two facilities in Sioux City, but it has opened a production plant in Missouri and two others in South Dakota, where taxes are lower.