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Lawmakers plan property tax work again in ’13

Forum offers preview of session

December 15, 2012
By BILL SHEA, , Messenger News

Changing the way commercial property is taxed in Iowa will again be a major goal when the state Legislature convenes next month, three lawmakers who serve Webster County said Saturday morning.

State Sen. Daryl Beall, D-Fort Dodge, said commercial property tax reform is the highest priority of Democrats and Republicans in both chambers of the Legislature.

''I think all of us are determined to make it work,'' he said during an Eggs and Issues forum at Iowa Central Community College.

Beall and state representatives Helen Miller, D-Fort Dodge; and Tom Shaw, R-Laurens; also offered their thoughts on the federal health care reform law. They addressed the issue a day after Gov. Terry Branstad announced that Iowa will pursue a partnership with the federal government to create an insurance exchange required by the law.

About 15 people attended the forum, which was sponsored by the college and the Greater Fort Dodge Growth Alliance.

The Legislature will convene on Jan. 14. Eggs and Issues is held monthly while the lawmakers are in Des Moines, but Saturday's event was the first time it was held before a legislative session.

Property taxes

A complex formula called the rollback determines how much of an Iowa home's value is subject to property taxes. In recent years, homeowners have been paying taxes on about 50 percent of their property's value.

Businesses do not benefit from the rollback. They pay taxes on 100 percent of the value of their property.

For 20 years or more, state leaders have tried to address commercial property taxes. The issue gained renewed emphasis when Branstad returned to office in 2011. Legislators worked on property tax reform proposals during their 2011 and 2012 sessions, but nothing was passed.

''We're starting kind of from the beginning this upcoming session,'' Miller said.

Beall said there are two main stumbling blocks that are impeding commercial property tax reform. One, he said, is the knowledge that reform will result in less revenue for local governments.

The fear that reform will shift the property tax burden from businesses to homeowners is the other stumbling block, according to Beall. He said such a shift would be bad public policy. He added that it would also be bad politics since there are more homeowners than businesses in the state.

Shaw said reducing commercial property taxes will allow businesses to expand and will encourage more companies to come into the state.

He added that tax increment financing, the practice in which increased property tax revenue from a designated area is set aside to be reinvested in that area, should be examined by legislators. He said some entire cities are tax increment financing districts, and that deprives the local school districts of revenue.

Fort Dodge City Councilman Kim Alstott told the lawmakers that Fort Dodge is the ''poster child'' for proper use of tax increment financing. He said just 4 percent of the city is in tax increment financing districts.

Alstott asked the lawmakers to make good on Branstad's pledge to use state money to offset revenue cities lose because of property tax reform.

Health care reform

Shaw opposes the federal health care reform law.

''I have just literally been bombarded by small business owners who are not hiring, looking to reduce staff, not wanting to expand their business, because there is so much uncertainity out there with the costs of the Affordable Care Act,'' he said.

Beall said there is now less uncertainty surrounding the law because the U.S. Supreme Court has found it to be constitutional and President Barack Obama was re-elected.

''It's a fact of life,'' he said.

Miller added ''We have got to get our arms around it and move forward.''

Beall said some parts of the law are very popular. The provision that prohibits insurers from denying coverage to people with pre-existing conditions and the one that allows parents to keep children on their polices until they turn 26 are some of the popular aspects of the law, he said.



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