Gov. Branstad touts tax plan in Newton
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Gov. Terry Branstad has put extra pressure on Senate Democrats in recent days to pass his plan lowering state commercial property tax rates, and at a town hall-style meeting Tuesday night in Newton the Republican governor upped the ante. Branstad announced a potential compromise with the plan’s opponents that would put an increase in Iowa’s earned income tax credit back on the table.
“I’ve indicated, and we haven’t even had formal discussions about this, I know they (Democrats) want the earned income tax credit,” Branstad said. “I feel very strongly that we need to have this permanent commercial property tax relief, and one that protects the other class of property. I’m willing to consider doing something on the earned income tax credit as part of that.”
Branstad vetoed an increase on the tax credit last year, but his administration hopes bringing the issue back will cause Senate Majority Leader Mike Gronstal, D-Council Bluffs, to allow the bill that has already been approved by the House, to reach the Senate floor.
“It’s an issue that the House has already passed and the Senate needs to approve it,” Branstad said. “Sen. Gronstal will not let it come up for debate in the Senate, and that’s why he needs to be replaced ... I don’t think any person should be able to deny people the right to vote on an issue that important.”
After speaking at Uncle Nancy’s Coffeehouse and Eatery on Newton’s downtown square with Lt. Gov. Kim Reynolds, the Iowa Republican said that he plans to speak with Gronstal today and said he believes the Senate leader “knows that this decease is long overdue.”
Branstad told the modest sized crowd his administration has calculated that property taxes state-wide will increase by $2 billion in an eight-year period under the current code. He emphasized changing property classes so that residential property rates would no longer be tied to agricultural property values, which have seen an increase in value in recent years due to rising commodity prices.
“The lawyers are dropping off the $ 3 corn and the $6 beans, and now we’ve got $6 corn and $12 beans,” he said. “When you tie residential to that you see both of those (rates) go up dramatically.”
The Republican plan has already passed the House in a 59-40 vote last week and would enact a 40 percent across the board cut on commercial property tax rates over eight years while limiting the growth of residential rates. House and Senate Democrats have put forth a competing plan that would cut taxes on the first $390,000 of a property’s value. The Democrats argue that their plan would isolate small and local business and not give the tax breaks to larger companies operating within Iowa but based elsewhere.
Branstad has been pushing for his plan, claiming a trickle down effect would benefit Iowa renters by reducing property taxes on landlords and theoretically allowing the property owners to pass the lower costs on to their tenants.
In pitching his plan to Newton residents, the governor said his plan would reduce commercial tax collections by $347 million, $226 million in agriculture and $606 million in residential collections during its 8-year period. (Editor's Note: Corrected to $606 million).
Many municipalities across Iowa have voiced concerns that the declining revenue from the Branstad proposal would diminish city treasuries, forcing towns such as Newton to raise local property tax collections.
Newton Mayor Chaz Allen, who introduced Branstad and Reynolds Tuesday, said that the city would make cuts in spending before local property taxes were raised.
“I think there’s a lot of debate to be done between the House and the Senate, and we’ll see what happens when they come up with a final plan,” Allen said. “We’ll make reductions before the back-fill is removed. So we’ll manage our budget that way and make the reductions we have to make.”
Critics of Branstad’s proposal have questioned if the tax cuts would have an adverse effect on state education funding, but the governor told Newton residents that the loss would be made up in additional state monies generated by stronger than expected agricultural revenue and last year’s state departmental budget cuts. One Uncle Nancy’s audience member proposed this concern to Branstad.
“With education, wanting to build it in the state and make it world class, how can you when you start taking property tax and moving it around?” the man asked.
Acknowledging that farm and commodity prices are subject to fluctuation, the governor said that even if prices fell it would be several years before the revenue losses would be felt.
Tuesday’s 5:30 p.m. stop was part of a Branstad-Reynolds pledge to visit all 99 Iowa counties this year.
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Uncle Nancys seems to support a lot of Republicans. If you're a Democrat, keep that in mind before you spend your money there! It doesn't look like Branstad attracted a very big crowd. |
