Branstad calls for commercial property tax cut
DES MOINES (AP) — Gov. Terry Branstad unveiled a budget proposal Tuesday that includes plans to substantially cut Iowa’s commercial property taxes, a step he contends is necessary to compete with neighboring states.
Branstad’s roughly $6.5 billion financial plan also limits property tax increases for residents, allocates new spending for education and establishes incentives to keep more medical school graduates in the state.
“Iowans are entering a period of unprecedented opportunity, and we in this chamber have it within our grasp to help foster this state’s greatest economic expansion and quality of life improvement in modern history,” Branstad said during his annual “Condition of the State” address.
Branstad said his tax plan will cost $400 million over the next five years. Aides said the bulk of that cost would be used to pay for the commercial property tax cuts.
Branstad’s proposal would gradually reduce the taxable values of commercial property, so those owners would eventually pay taxes on just 80 percent of the assessed property value.
State lawmakers will assess the plan in the coming months. In previous years, Branstad has unsuccessfully sought commercial property tax cuts. He is hoping that a more collaborative tone, coupled with new blood in the Legislature and a nearly $1 billion in surplus dollars might help his case for all his proposals.
Under his plan to keep more medical school graduates in the state, Branstad proposed spending $2 million to increase medical residency programs in Iowa. He also hopes to reform Iowa law to limit medical lawsuits.
On Monday, Branstad announced his proposal to raise teacher starting salaries from $28,000 to $35,000, add incentive pay for teachers and make other reforms. The education package would cost $187 million over five years.