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Property tax reform hot topic at capitol
By Steve Dunn/Gate City Managing Editor
DES MOINES - Don't expect the Iowa Legislature to pass a comprehensive property tax reform measure this session.
“If it was that easy (to do), it would have been done by now,” state Sen. Tom Courtney, D-Burlington, told more than 80 community leaders including students during Great River Region Days in Des Moines Wednesday. “I don't think we'll do it until we have a non-partisan commission like we do with redistricting every 10 years.”
Property tax reform is one of the critical issues being discussed with legislators during the annual two-day event at the state capital. Iowa ranks fifth highest in the nation in urban commercial property taxes, according to a recent 50-state comparison.
State Sen. Joel Bolkcom, D-Iowa City, said a legislative study commission is halfway through a two-year study of the state's property tax system. The commission is looking at how states support public services such as libraries.
“The (tax) burden has been shifted to commercial property owners,” Bolkcom said.
Commercial property, which does not receive a rollback, is taxed at 100 percent of valuation. Residential property, which does receive a rollback, is taxed at 44 percent of valuation. Agriculture property is taxed at 30 percent of its value.
State Rep. Jamie Van Fossen, R-Davenport, said, “There is hope. Don't give up. We need to protect the residential property taxpayer.”
From a historical perspective, there doesn't appear to be a very good chance of major changes to the property tax system this session, state Rep. Phil Wise, D-Keokuk, said.
Wise said legislators have four options: Have the state pick up more of the cost of government, find greater efficiencies at the local level, shift the tax burden from one class of property to another or do nothing.
Bolkcom said a Cedar Rapids city manager has suggested coupling revenue increases with “smart growth” techniques, which would affect urban governmental budgets the most.
“It takes a $300,000 house to pay for the services to that house (in Iowa City),” Bolkcom noted.
Van Fossen said there is another proposal to give rollbacks to other classes of property. Another option for local governments is to impose franchise fees on utilities, which is being tested in court now, he added.
While the state doesn't collect property taxes, it makes rules on property taxes and sets limits on tax rates, Van Fossen pointed out.
“When the state doesn't meet its obligations, then property taxes go up,” he said.
Janet Fife-LaFrenz of Keokuk said she understands the difficulty legislators have in trying to revamp the property tax system, especially in an election year.
“Someone is going to have to pay more taxes so others will be able to have (tax) relief,” she said.
When Keokuk Mayor David Gudgel asked if legislators realize the current property tax system is stifling economic development, Van Fossen said awareness has been raised in the Legislature, “but there is a blame game going on between state and local government.”
“I'm frustrated as ever and still struggling,” Van Fossen added.
There was some positive news, though.
Wise said he will introduce a bill soon to address the commercial property tax burden issue by using alternative revenue sources.
Bolkcom said the cigarette tax hike last year produced a $130 million revenue increase, which has been put in a tobacco trust fund for health care.
Bolkcom also said it appears the state will not tax the federal rebates that Iowans will receive in May as part of the federal government's stimulus package.
In addition, a so-called Microsoft bill has been written to entice Microsoft or some other search engine company to Iowa, according to Van Fossen.
Wednesday's schedule also included sessions on economic growth with Wise and state Rep. Bill Schickel, R-Mason, and another session on education and workforce issues with state Sen. Paul McKinley, R-Chariton, and Elisabeth Buck, the new director of Iowa Workforce Development. A legislative reception capped the first day of activities. During the reception, Scott Smith of Alliant Energy updated the audience on the company's renewable energy efforts, including the construction of a new wind farm.
Wind farm energy accounts for 4 percent of Alliant's energy output now. Once the Whispering Willow project is complete in the late fall of 2009, the figure will increase to 6 percent.
Today's schedule included a breakfast with House leadership and sessions on the Fort Madison prison and transportation.
In addition, students from a student leadership class at Southeastern Community College presented a program. Nine students from Keokuk, Fort Madison, Central Lee and Holy Trinity are with the group. They include Drew O'Bleness, Logan Piper and Olivia Vandenberg from Keokuk; Eric Dirth and Jennifer Faulkner from Fort Madison, Taylor Edgar and Eileen Mulholland from Central Lee, and Wes Pieper and Shannon Wheeler from Holy Trinity.
“It's interesting to see what goes on,” said Vandenberg at Wednesday night's reception. “It's more personal than I thought it would be.”
A lunch in the capitol rotunda capped today's schedule. Each person from Southeast Iowa was asked to wear a white shirt with a Southeast Iowa logo so that the group was easy to recognize. In addition, the Southeast Iowa Symphony provided entertainment.
Great River Region Days is a collaborative, regional effort between the economic development organizations and chambers of commerce in Keokuk, Fort Madison, Burlington/West Burlington, Mount Pleasant and Louisa County.
“If it was that easy (to do), it would have been done by now,” state Sen. Tom Courtney, D-Burlington, told more than 80 community leaders including students during Great River Region Days in Des Moines Wednesday. “I don't think we'll do it until we have a non-partisan commission like we do with redistricting every 10 years.”
Property tax reform is one of the critical issues being discussed with legislators during the annual two-day event at the state capital. Iowa ranks fifth highest in the nation in urban commercial property taxes, according to a recent 50-state comparison.
State Sen. Joel Bolkcom, D-Iowa City, said a legislative study commission is halfway through a two-year study of the state's property tax system. The commission is looking at how states support public services such as libraries.
“The (tax) burden has been shifted to commercial property owners,” Bolkcom said.
Commercial property, which does not receive a rollback, is taxed at 100 percent of valuation. Residential property, which does receive a rollback, is taxed at 44 percent of valuation. Agriculture property is taxed at 30 percent of its value.
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From a historical perspective, there doesn't appear to be a very good chance of major changes to the property tax system this session, state Rep. Phil Wise, D-Keokuk, said.
Wise said legislators have four options: Have the state pick up more of the cost of government, find greater efficiencies at the local level, shift the tax burden from one class of property to another or do nothing.
Bolkcom said a Cedar Rapids city manager has suggested coupling revenue increases with “smart growth” techniques, which would affect urban governmental budgets the most.
“It takes a $300,000 house to pay for the services to that house (in Iowa City),” Bolkcom noted.
Van Fossen said there is another proposal to give rollbacks to other classes of property. Another option for local governments is to impose franchise fees on utilities, which is being tested in court now, he added.
While the state doesn't collect property taxes, it makes rules on property taxes and sets limits on tax rates, Van Fossen pointed out.
“When the state doesn't meet its obligations, then property taxes go up,” he said.
Janet Fife-LaFrenz of Keokuk said she understands the difficulty legislators have in trying to revamp the property tax system, especially in an election year.
“Someone is going to have to pay more taxes so others will be able to have (tax) relief,” she said.
When Keokuk Mayor David Gudgel asked if legislators realize the current property tax system is stifling economic development, Van Fossen said awareness has been raised in the Legislature, “but there is a blame game going on between state and local government.”
“I'm frustrated as ever and still struggling,” Van Fossen added.
There was some positive news, though.
Wise said he will introduce a bill soon to address the commercial property tax burden issue by using alternative revenue sources.
Bolkcom said the cigarette tax hike last year produced a $130 million revenue increase, which has been put in a tobacco trust fund for health care.
Bolkcom also said it appears the state will not tax the federal rebates that Iowans will receive in May as part of the federal government's stimulus package.
In addition, a so-called Microsoft bill has been written to entice Microsoft or some other search engine company to Iowa, according to Van Fossen.
Wednesday's schedule also included sessions on economic growth with Wise and state Rep. Bill Schickel, R-Mason, and another session on education and workforce issues with state Sen. Paul McKinley, R-Chariton, and Elisabeth Buck, the new director of Iowa Workforce Development. A legislative reception capped the first day of activities. During the reception, Scott Smith of Alliant Energy updated the audience on the company's renewable energy efforts, including the construction of a new wind farm.
Wind farm energy accounts for 4 percent of Alliant's energy output now. Once the Whispering Willow project is complete in the late fall of 2009, the figure will increase to 6 percent.
Today's schedule included a breakfast with House leadership and sessions on the Fort Madison prison and transportation.
In addition, students from a student leadership class at Southeastern Community College presented a program. Nine students from Keokuk, Fort Madison, Central Lee and Holy Trinity are with the group. They include Drew O'Bleness, Logan Piper and Olivia Vandenberg from Keokuk; Eric Dirth and Jennifer Faulkner from Fort Madison, Taylor Edgar and Eileen Mulholland from Central Lee, and Wes Pieper and Shannon Wheeler from Holy Trinity.
“It's interesting to see what goes on,” said Vandenberg at Wednesday night's reception. “It's more personal than I thought it would be.”
A lunch in the capitol rotunda capped today's schedule. Each person from Southeast Iowa was asked to wear a white shirt with a Southeast Iowa logo so that the group was easy to recognize. In addition, the Southeast Iowa Symphony provided entertainment.
Great River Region Days is a collaborative, regional effort between the economic development organizations and chambers of commerce in Keokuk, Fort Madison, Burlington/West Burlington, Mount Pleasant and Louisa County.
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| Flock over to Safford for a fun musical | Around the Tri-State Area this weekend |
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