The president of the Iowa Senate is hinting Republicans are ready to end state payments to cities and counties that were promised to make up for expected lost tax revenue.
The state payments began after the legislature voted in 2013 to roll back commercial property tax rates. Senate President Jack Whitver, a Republican from Ankeny, says $150 million in state tax dollars will be forwarded to cities and counties in the current year — but next year’s payments are up for debate.
“I believe there’s general agreement in the legislature that we don’t want to touch that for the current fiscal year,” Whitver says. “Those cities and counties have already certified their budgets. It would be very difficult for them to go back and change that, but I believe they should be on the table for the next few years.”
The 2013 property tax changes approved by Republican Governor Terry Branstad, the Republican-led Iowa House and Democratically controlled Iowa Senate not only reduced commercial property tax assessments by 10 percent, property taxes for apartments were reduced as well. City officials say the state payments are not compensating for lost tax revenue — and if the state payments end they’ll be forced to cut city services.
Whitver and other Republican leaders argue cities have benefitted from the legislature’s move to reduce property taxes five years ago.
“Many places around the state have seen tremendous growth since then both with assessments and with new buildings and so I believe we should look at phasing that out over time,” Whitver says. “…We obviously don’t want to do something that’s harmful, but ultimately that’s $150 million that we’re paying to the cities and counties that we’d like to phase out. I’d like to phase out.”
In December, Governor Kim Reynolds said she wants to bring city and county officials into the negotiations over if and when the payments from the state end.
Whitver made his comments during a weekend appearance on Iowa Public Television’s “Iowa Press” program.