A key senator has publicly issued a new challenge as legislators struggle to resolve their dispute over how to cut commercial property taxes. Senator Joe Bolkcom, a Democrat from Iowa City, is chairman of the Senate panel that drafts tax policy.

“No tax cut will pass the Senate Ways and Means Committee before the ‘working families tax cut’ is passed for the third time by the Senate, is passed for the third time by the House, and finally signed into law by Governor Branstad,” Bolkcom said on the Senate floor on Tuesday.

He’s talking about what’s called the Earned Income Tax Credit, a tax break geared toward low-income households with an annual income of less than $45,000.

“When you cut taxes for these working families, the money won’t be spent on yachts, third homes or stashed in Swiss bank accounts,” Bolkcom said. “…They will use that tax cut to buy things from local Iowa business — things like milk, gas, pay for rent, fix their car, put food on the table.”

Last year the Republican-led House and Democratically-led Senate twice passed an increase in this tax break, but Republican Governor Terry Branstad rejected it on both occasions. Bolkcom is refusing to pass any sort of commercial property tax cut until Branstad agrees to increase the Earned Income Tax Credit.

“This is a pro-family, pro-economic growth, pro-work tax cut,” Bolkcom said. Branstad has said this particular tax break for low-income Iowans is too big a hit to the state treasury.

Increasing the Earned Income Tax Credit to 10 percent would have saved low-income Iowa families about $28.5 million in taxes last year, taxes that wouldn’t have been paid to the state. Branstad has said he prefers tax breaks that would bring “new business and jobs” to the state, like the reduction in commercial property taxes. Branstad has vowed to press for a “comprehensive” approach to tax policy rather than giving tax breaks to certain classes of individuals.

About 240,000 low income families qualify for the Earned Income Tax Credit.