Two key statehouse decision makers say yesterday’s Senate vote on a property tax plan is “productive,” but negotiations continue over what should be in the final package.
The senate’s action provides some “momentum,” according to Governor Kim Reynolds. “We’re talking about: where do we align, what’s different, how do we get there, what are we missing?” Reynolds told reporters earlier today. “…We’re off to the races.”
GOP lawmakers set a goal of taking steps to reduce residential property taxes this year and the Senate’s bill would provide a 50% homestead tax exemption. House Speaker Pat Grassley this afternoon told reporters House members are still reviewing the senate’s bill to ensure it does not result in a tax shift to business or agricultural property. “And then we start seeing where we can find places where we can find a level of compromise,” Grassley said during his weekly news conference.
One key sticking point that remains is the two percent limit on annual property tax revenue growth that House Republicans and Governor Reynolds have proposed. The Senate’s plan has a “soft cap” that would fluctuate between two and five percent, based on the inflation rate. The Senate’s bill also includes a gas tax increase, along with a mechanism that would trigger incremental gas tax hikes in the future.
Senator Dan Dawson, a Republican from Council Bluffs, led development of the Senate’s bill. “Since the Iran war started, gas has increased on average $1.04 in Iowa,” Dawson told reporters late yesterday. “Under this modest proposal, it would take 138 years for the gas tax to increase what it has in the last five weeks.”
House Speaker Grassley said House Republicans have not discussed whether they’d support adding a gas tax increase onto a property tax reduction bill. The last time Iowa lawmakers voted on a gas tax hike was in 2015, when the state tax on gas was raised to 30 cents a gallon.