Some Republicans in the legislature have said it’s time to end state payments to cities, counties and school districts that cover a decline in commercial property tax revenue, but Governor Kim Reynolds is reluctant to break a promise.
“That’s not a priority of mine to do anything with that right now,” Reynolds says. “That is a promise that we made to them.”
The annual payments were set up in 2013 when the legislature and Governor Terry Branstad acted to cut commercial property tax rates by 10 percent. Reynolds is open to discussing changes in the future as part of a larger tax reform package, but she says local officials need to be part of the negotiations.
“I want them at the table. I want them to be a part of that discussion, but we’ve promised them that and I don’t think we should go back and take away something that we’ve promised midyear,” Reynolds says. “I just don’t think that’s fair to them.”
Reynolds made her comments during an interview with Radio Iowa.
The state is scheduled this year to pay more than $150 million to account for lower commercial property tax payments to local governments. Without that money from the state, local officials say cities, counties and school districts would be forced to make budget cuts or raise local property taxes.