DES MOINES — The split-control Iowa Legislature on Tuesday faced the prospect of ending its second straight session without resolving a commercial property tax relief issue that has dogged lawmakers since the beginning of the 84th General Assembly in January 2011.
Hope for a compromise plan to reduce by up to 40 percent of the property tax burden of owners of commercial and industrial property over a multiple period of years dimmed when majority Democrats in the Senate rejected a more-expansive, GOP-led House version in favor of one that would have delivered reductions to at least 63 percent of small businesses and sought to better cushion the blow to local governments.
Senate Republicans offered the House plan in amendment form during an animated floor debate late Tuesday, but the proposal was turned back by Senate Democrats 21-26. However, Sens. Rob Hogg, D-Cedar Rapids, and Jack Hatch,
D-Des Moines, joined the GOP minority in taking down the majority party’s $350 million relief plan by a 24-23 margin, leaving the future of the issue in partisan limbo as the Legislature moved to end the 2012 session as early as today.
“They sunk their own bill,” said Sen. Randy
Feenstra, R-Hull, who led the effort to win Senate support of the House-passed bill and criticized Democrats for walking away from an approach that won 71-26 bipartisan support among representatives.
Before the floor debate, Hatch said he was concerned the $350 million in relief would unduly hit and hurt cities, counties and school districts with lost revenue, while Hogg said state government already is failing to meet its financial obligations without siphoning off revenue to lower business taxes. He said the biggest loss of businesses in Cedar Rapids was due to the 2008 flood, not property tax burdens, and the current direction of paring back key government services was doing more to hurt the state’s growth and employment prospects.
“Iowans are sick and tired of all these games we’ve been playing,” said Sen. Brad Zaun, R-Urbandale.
However, Senate Majority Leader Mike Gronstal,
D-Council Bluffs, said it appeared GOP senators were playing politics, nixing a $350 million package this year after voting 46-4 for a $200 million deal last session.
“I’m mystified,” said Gronstal, who noted that negotiators no longer have a legislative “vehicle” to work from. “We’ll assess. We’ll look for the opportunity to find common ground on this. This is not a good signal.”
Sen. Randy Feenstra, R-Hull, who led the effort to win Senate support of the House-passed bill, criticized Democrats for walking away from an approach that won 71-26 bipartisan support among representatives.
Sen. Joe Bolkcom, D-Iowa City, chairman of the Senate Ways and Means Committee, said prospects for resolving differences over the session’s top priority for both political parties and Gov. Terry Branstad were “drama filled.”
“The governor needs to get a little bit more engaged with his Republican colleagues to show them the way here,” Bolkcom said. “We need his involvement if we’re going to get this across the line.”
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However, Branstad — in Decorah for a town meeting — told reporters the property tax issue appeared to be stalling in the Senate and that “if the Senate Democrats fail to take it up or pass it, I think the onus is going to be on them for failing to do what they promised they were going to do and we’re going to hold them accountable.”
The mounting uncertainty over the future of the property tax issue came on a day when mayors of Iowa’s 10 largest cities made an 11th-hour push campaign against a key provision in both the House and Senate plans that would reclassify apartments and other multi-resident housing as residential — rather than commercial — property, essentially cutting the taxes in half.
House Speaker Kraig Paulsen, R-Hiawatha, said the best way to end the uncertainty was for the Senate to send the House bill to Branstad.
“The Senate, the House, the governor (have) pieces in there, so unless we’re going to add more relief to it or something along those lines, we’re not very interested in backing up,” he told reporters.
House-Senate negotiators also were trying to finalize a $1.6 billion health and human services budget bill for fiscal 2013 that included controversial abortion-related language. House members were pushing to prioritize funding for women’s health services in a way that would put providers of abortion services at the low end of the priority list — a provision that was rejected by Senate negotiators.
Lawmakers also had to finalize a wide-ranging measure dealing with standing appropriations and a host of other issues. House-Senate conferees agreed to provide $106 million to fund local government property tax credits but stripped out $3 million earmarked to keep the University of Northern Iowa’s Price Lab School open for a year while the closure received more study. The language calling for the study also was removed from House File 2465.
The House voted 90-7 to approve the measure Tuesday evening.
Also Tuesday, the Senate passed a measure aimed at redesigning the county-based mental health system but the House refused to concur and sent the issue to conference committee.