At least two observers of the most recent installment of the great property tax debate in the Iowa Legislature believe that this could be the year something positive happens, even if in little steps.
With a budget agreement in hand, lawmakers are expected to rush for the exits by Friday, after working for two weeks sans expense checks, but not before reaching a compromise on property tax legislation.
"At this point, I am very optimistic," said Sharon Presnall, senior vice president for the Iowa Bankers Association, which has pressed for changes to the state's commercial property tax structure for several years.
If for no other reason, an agreement could be reached because, "I don't think doing nothing was an option," she said.
Iowa presently taxes commercial and industrial property on a formula based on 100 percent of its value. Residential property is taxed at a little more than 50 percent of value. Gov. Terry Branstad and Republicans have sought a rollback for all sizes of commercial and industrial property. Studies have shown that owners of large properties, such as big-box retail stores, would benefit the most from the Republican plan. A plan proposed by Senate Democrats is weighted to benefit small businesses the most.
A compromise could include a smaller rollback under the Republican plan, which has proposed assessing commercial and industrial property at 80 percent of value, plus a more limited tax credit under the Democrat plan.
Another key element of reform has been to limit the annual increase in statewide valuations, which currently can increase 4 percent a year. Gov. Branstad at one time proposed limiting the increase to 2 percent. It is possible that property tax legislation, if it does in fact come out of the Legislature, could limit the increase to 3 percent.
Jim Carney, who lobbies on behalf of the Iowa Commercial Real Estate Association, said he is more optimistic than normal that a compromise will be reached.
However, there are a range of impediments, including how the lawmakers decide to deal with Medicaid expansion and its impact on state revenues.
"I think there's a very good chance that they'll do a property tax bill, but it's so difficult, and it's funny because they have all this money sitting around," Carney said.