Two key legislators say they’re closer to agreement on a bill to set new restrictions on cities and counties that grant tax breaks to businesses that locate in certain zones. Representative Tom Sands, a Republican from Wapello, is chairman of the House Ways and Means Committee.
“I do see a path. There are some days when that path appears to be circular instead of in a straight line,” Sands says. “But we’ve been meeting for several weeks, trying to come to a certain amount of consensus.” Senator Joe Bolkcom, a Democrat from Iowa City who is chairman of the Senate Ways and Means Committee, says these zones, called Tax Increment Financing districts, need more scrutiny,
“I think we have a great opportunity to work in a bipartisan way to put together a bill,” Bolkcom says. “There’s a lot of interest in trying to tighten this up, while still making sure it’s a good, robust economic development tool.” Bolkcom says lawmakers aim to require public disclosure of the size of the tax breaks cities and counties are offering businesses in these zones.
“We are a little bit in the dark in the sense that we don’t have a very good database,” Bolkcom says, “Cities hardly report any information to the state on how they use this $285 million every year and I think part of this is putting in place a system where we can get a better handle on all the ways it’s being used and, at that point, make some judgments about what’s working and what isn’t.”
The trickiest issue for legislators to address is “piracy” where one city offers this particular tax break to lure a business from another city that had granted this tax break years ago, but it will expire soon. “I don’t know as we’ll ever get to a point where it’s unanimous on both sides, but then again, I’m not sure that should be the goal,” Sands says.
“The goal should really be to get a good law passed and I believe there is a way to do that passed in the House and the Senate, but it could be a fairly close vote.” Sands, Bolkcom and a few other legislators met over the noon-hour with staff to review ideas for tackling this topic.
