DES MOINES (AP) — Gov. Terry Branstad said Monday that his proposed overhaul of Iowa's property tax system is drawing bipartisan opposition as he tries to move it through the Legislature, but he said he is optimistic his effort will prevail.
The governor said he is negotiating with the Republicans running the House and the Democrats running the Senate and is willing to make concessions to win approval for his plan to end decades of disagreements over the tax.
“This is a process of negotiation, and we're negotiating with the end in mind,” the governor said at his weekly press conference. “We recognize there are some things we need to work on in the House and some things we need to work on in the Senate.”
The House approved a property tax overhaul last week, but only after the addition of a Republican-supported provision to increase the state's share of local school budgets, replacing property tax dollars with state funding.
Seeking a middle ground with Senate Democrats, the governor said he's willing to reconsider his position on a provision that he has twice vetoed to expand a tax break for the working poor. The governor said he plans to discuss the provision with Senate Majority Leader Michael Gronstal, D-Council Bluffs.
Branstad's proposal would cut the property taxes paid by businesses by 40 percent over eight years, a move Democrats argue would benefit out-of-state companies the most. They say his plan would shift the burden to homeowners and drain local government budgets, and have proposed a more modest plan that they say would benefit small businesses.
“We still have very significant reservations about the tax shift in his plan,” said Gronstal, adding that the governor's willingness to discuss the earned income tax credit to benefit the working poor will not offset concerns about shifting the burden. He said he's not willing to trade one for the other.
Branstad says his plan would cut about $1.2 billion in property taxes over eight years, with homeowners getting $606 million of that total. “This is the year to reverse that trend and give Iowans the property tax relief they deserve,” Branstad said.
He said his proposed overhaul focuses on business property taxes because they have grown faster than any other class — an average increase of more than 8 percent a year over the past 10 years.
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