The Republican-controlled Iowa House introduced a property tax reform bill Friday separate from the Democratic-led House's proposal as lawmakers continued to finalize the state budget during their overtime session.
"It is very important to House Republicans that homeowners are included in the proposal in some way and fashion," House Speaker Kraig Paulsen said Friday. "It does not appear to me at this time that there is anything meaningful in there for them."
Paulsen, R-Hiawatha, said he didn't anticipate a scenario in which House Republicans would back down from the language in their proposal. He also said the only relief provided in the Senate proposal is tax credits. The House version would include $379 million in overall property tax reductions, including a $120 million tax credit for businesses.
Jeff Boeyink, chief of staff for Republican Gov. Terry Branstad, said Friday that House and Senate lawmakers have a general agreement on a compromise framework, but still have to work out the details. Boeyink said the House version contains all of the pieces needed to reach a final agreement.
The House proposal includes permanent reductions in property value for commercial and industrial property taxpayers, which would lower their tax burden. It also offers property tax credits for businesses and changes that would treat rental properties the same as residential properties for taxation purposes.
It also would raise the earned income tax credit for low-income families, although not as much as the Senate plan.
Property taxes are rising alongside land values. The price of Iowa farmland has risen 160 percent during the past decade to an average of $5,064 per acre in 2011, according to Iowa State University. Commercial properties in Iowa are taxed at 100 percent of their assessed value, while residential properties are taxed at 50 percent.
Senate Majority Leader Mike Gronstal has said the Senate's property tax measure _ which borrows from the House, Senate and governor's original proposals _ would represent a 25 percent decrease in the commercial property taxes collected by the state, the largest cut in state history.
Gronstal said the reductions would total more than $350 million for businesses, out of the $1.4 billion the state collects each year. It also would lower property taxes on rental properties.
The governor's office, the Senate and the House generally have agreed on spending about $6.24 billion from the state's general fund budget during the next fiscal year, up about 3.8 percent from the current year's budget. It's the underlying individual budgets have that sparked contention _ how money is allocated within the budgets and the millions that are spent outside the general fund.
