As the 2011 Legislative Sessions moves forward, the issue of property tax reform is moving to the forefront of discussions at the Statehouse. Currently, three different proposals are circulating through the Statehouse.
Governor Branstad’s Property Tax Proposal
Earlier this year, Governor Branstad proposed reducing the assessment of commercial property by 40% over the next 5 years. The Governor’s proposed property tax plan, House Study Bill 129, is currently in the House Ways and Means Committee. The House Committee has held a subcommittee meeting on GovernorBranstad’s proposal, but no other action has been taken on the bill.
Senate Democratic Majority Party Property Tax Proposal
The Senate Ways and Means Committee Chair, Senator Joe Bolkcom (D-Iowa City), has offered a different property tax proposal. Senate Study Bill 1205 would create a new property tax credit for commercial property, industrial property, and railway property. The Senatebill allows for the total amount of property credits to begin at $50 million beginning in State Fiscal Year 2013, and the amount of allowed property tax credits could grow to a maximum of $200 million. The Senate held a subcommittee meeting to discuss Senate Study Bill 1205 on Thursday, April 7th, and will likely move forward in the Senate Ways and Means Committee as early as Tuesday, April 12th.
House Republican Majority Party Property Tax Proposal
The House Ways and Means Committee Chair, Representative Tom Sands (R-Wapello), and other House Republican Representatives introduced their property tax proposal, House File 9, in January. This proposal, now House File 671, is a two-part property tax reform. The first part of the bill would provide direct dollar-for-dollar property tax relief across Iowa through gradually increasing the amount of state aid for Iowa schools. The second piece of reform in the House proposal would tie commercial property to residential property and agricultural property. This would allow the classes of property to be joined together in a combined rollback structure, which would limit the valuation growth of all four classes of property to the lesser of the smallest growth in any one ofthe classes or four percent. This proposal was voted out of the House Waysand Means Committee on a party-line vote of 15 Republican Representatives voting in favor and 10 Democratic Representative voting in opposition. House File 671 could be debated in the House as early as Monday, April 11th.
While there are three differing proposals in the Legislature, it appears there will be some kind of change to the Iowa property tax system before the end of the 2011 Legislative Session, which is scheduled to end on Friday, April 29th.
Senate and House Committee Remain Unable to Find Common Ground on Tax and Spending Bill
Legislature approves separate bill to address some issues, but the future of a Tax Relief Fund for Iowa taxpayers remains unclear.
Although more than four weeks have passed since the Senate and House formed a Conference Committee to resolve the differences on Senate File 209, the tax and supplemental spending bill, consensus stillhas not been reached.
The House-approved version of Senate File 209 would create a Tax Relief Fund which would capture any excess state tax collections, and then return this money to the Iowa taxpayers. The House Republican Conference Committee members have remained firm and insist on the creation of a Tax Relief Fund to remain part of any supplemental spending package. The Senate Democratic Conference Committee members have expressed a willingness to create a Tax Relief Fund, however the details ofwhich are uncertain.
This week, due to concerns over the state’s funding responsibility for indigent defense claims, the Senate and the House approved Senate File 512. This bill gives the Governor the ability to pay indigent defense bills and also adopts changes to the Iowa income tax code to reflect changes which have been made to the federal income tax code; however the tax and spending measures within Senate File 512 are different from Senate File 209. This means the Conference Committee from the Senate and House still need to reach an agreement on Senate File 209, and the creation of a Tax Relief Fund.
There is still a possibility the Conference Committee could come to an agreement on this bill before the end of the Legislative Session. Please continue to look for updates in The Watchdog on the progress of the Conference Committee on Senate File 209 and the Tax Relief Fund.
Iowans for Tax Relief Launches Statewide Radio Campaign.
On Thursday, April 7th, we launched a statewide radio campaign opposing the new tax increase under discussion at the Statehouse. This tax increase would single out Iowa casinos, and would raise taxes on them by 64%.
Unfortunately, this tax increase is fundamentally unfair and destroys Iowa jobs.
Under the proposal, state government would take almost $200 million from local communities and transfer that money to government bureaucrats in Des Moines. This would mean $200 million less for payroll and purchases in our local communities and $200 million more to be spent by state government in Des Moines.
For more information on how you can help us stop the tax grab, visit the ITR website at www.taxrelief.org.
You can listen to the ITR radio ad here.
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