Commercial property tax replacement funding questionable
No one in Iowa would probably argue that commercial property taxes – now levied with no rollback – should be lowered. However, where the money will come from to replace a proposed 40 percent reduction over five years is a huge question mark.
Gov. Terry Branstad has recommended an increase in taxes on casinos from 22 to 36 percent to offset a reduction in commercial property taxes. However, there appears to be a lot of opposition to that as well.
At Saturday’s legislative town hall meeting at the Estherville Public Library, Sen. Jack Kibbie and John Wittneben addressed the issue of commercial property tax reduction and replacement – among other issues.
Kibbie noted opposition to Branstad’s proposal to offset reductions in property taxes with an increased casino tax, leaving no way to fund a commercial property tax reduction.
Kibbie said a Senate bill that would exempt the first $75,000 of assessed value for businesses would cost the state $50 million to offset losses to local governments. “That question is would the state keep its word,” Kibbie said.
“The whole commercial property tax has to be reduced,” said Dave Seylar, adding that he thought commercial property taxes should be reduced across the board. “I think that’s a compromise that would be good for everybody big and small,” Seylar said.
On the other hand, Seylar objected to some factory farms that he said get by relatively easily.
“That bothers me a lot that that needs to be straightened out,” Seylar said.
Kibbie agreed, saying the ag productively formula is quite complicated. He also noted the road maintenance costs counties face with hog confinements on class B roads – without getting the revenue from those confinements to maintain those roads.