Governor Branstad has revamped his plan to reduce commercial property taxes and it includes a new, inflation-rate limit on the property tax increases cities and counties may charge.
“We have perfected the bill that we worked on last year,” Branstad says. Commercial property owners currently pay taxes on 100% of the property’s valuation. Branstad last year had called for gradually reducing that to 60% over the next five years, but he’s adjusting that to an 8-year-long phase down.
“Then we also have some provisions to assure local governments that they are not going to lose in this process,” Branstad says. “They’re not going to lose revenue between the additional state reimbursement and the growth we anticipate as more businesses grow and create jobs.”
Cities and counties raised objections to last year’s proposal and Branstad is promising a series of steps to reduce some “state government mandates” that cost local governments money, along with a direct reimbursement from the state of $50 million in the first year to local governments, $100 million in the second and $150 million in the third year.
After that, Branstad’s team has devised a reimbursement scheme that also anticipates property tax growth at the local level due to business expansion and a reduction in the amount of money local governments must spend to comply with some state requirements.
Branstad will lay out all his 2012 legislative priorities Tuesday during the governor’s annual “Condition of the State” speech to lawmakers.
AUDIO of the governor’s weekly news conference.