DES MOINES (AP) — The Iowa Senate approved a plan to reduce commercial property taxes Monday, setting up a fight with the House, which favors an alternate proposal from Gov. Terry Branstad.
The Democratic-controlled Senate voted 29-21 in favor of the plan, which would gradually provide commercial and industrial property owners with a tax credit.
“One of the best ways to help Iowa’s middle class is to grow Main Street. It will cut commercial property taxes for every Iowa business,” said Democratic Sen. Matt McCoy, of Des Moines.
Under the plan sent to the House on Monday, businesses would see a roughly 40 percent tax cut on the first $324,000 in assessed property value.
Republicans in the Senate prefer Branstad’s plan to reduce taxable assessments for commercial property owners by 20 percent. His proposal would also slow the growth of residential and agricultural assessments. House Republicans have given committee-level approval to Branstad’s plan.
The Democratic plan, which would not be funded in weak budget years, would gradually increase the amount given for the credit, capping it at an annual $250 million. Branstad’s tax plan would have an estimated annual cost of about $350 million by the time it is fully implemented on July 1, 2017.
“I support the governor’s vision that calls for permanent across the board property tax cuts,” said Republican Whip Rick Bertrand of Sioux City.
Branstad spokesman Tim Albrecht said the governor was hopeful lawmakers could find a compromise on commercial property tax cuts.
“We are pleased that the Senate is starting to move a property tax bill, and we consider this to be progress. We are not drawing any lines in the sand, and we are willing to work to find a solution that works for both legislative chambers,” said Albrecht.
Branstad is in China on a trade trip. He is scheduled to return Thursday.