The Iowa House has sent the governor legislation that calls for more disclosure of how cities and counties set up special taxing districts that critics say are being abused and over-used.
The House had proposed new restrictions for these “tax increment financing” districts where property taxes are diverted to pay for improvements like roads or sewers, but the Senate refused to embrace that plan. Senator Rick Bertrand, a Republican from Sioux City, warned that regulating or limiting this tool would hurt Iowa’s economy.
“It’s a distraction. It’s a job-killer,” Bertrand said. “It’s bureaucracy.”
Representative Chuck Soderberg, a Republican from Le Mars, says Senators made “significant modifications” in the House proposal.
“With that, I’m not sure you can call it reform anymore,” Soderberg says, “but there were some changes that I do concur with.”
The House voted 97-0 to send the scaled-back bill to the governor. Critics say cities and counties were given this tax tool decades ago to fix up slum and blighted areas, but cities now use it to lure a business to any area, not just blighted districts. But many rural legislators say it is often the only tool they have to finance the infrastructure improvements that lure businesses to rural Iowa.