Branstad touts tax plan

Iowa Gov. Terry Branstad and Lt. Gov. Kim Reynolds spoke about their plan to reduce property taxes at a townhall meeting at the Washington Free Public Library Tuesday afternoon. After the meeting, Branstand and Reynolds took questions from the audience, which was about 30 people.

Branstad distributed a sheet of paper to everyone in attendance that detailed his tax plan. Branstad said his plan would save Iowa taxpayers nearly $1.2 billion in property taxes over the next eight years. He said the Branstad-Reynolds plan would limit residential tax growth to 2 percent per year. Branstad said his tax cuts would also reduce the revenue local governments receive from property taxes. He said he would give money to cities and counties to offset the revenue loss. The plan has already been passed by the House of Representatives and has been sent to the Senate.

Branstad said that Iowa?s commercial property taxes were too high and that they were keeping businesses out of Iowa. He said that Japan recently lowered its corporate income tax rate, which made the U.S. the country with the highest corporate income tax. Branstad said when he was governor the first time, he was able to attract several Canadian businesses to locate in Iowa, but he said that in recent years, American companies have told him that they are considering relocating to Canada.

Washington City Administrator Brent Hinson said Iowa?s taxpayers are in-line with other states and that the business climate in the state is very favorable.

?Hardly a week goes by that you don?t see Iowa rated as one of the top places for business,? he said. ?I?m interested for your commentary on that because when you see these rankings, Iowa rates quite well in taxation overall. It was infrastructure spending that we were short on. That was one thing that was kind of a negative in our ranking.?

Branstad responded, ?It all depends on what taxes you look at. If you look at commercial property taxes, we rank terrible. We are the second highest in the nation.?

?How about overall taxes?? Hinson asked.

?Overall, our corporate income tax is good,? Branstad said.

Branstad said the state has a low number of start-up businesses, and he attributed that to the commercial property tax. Hinson said the bill the Senate Democrats have proposed is targeted to reducing taxes on small businesses. Branstad said that was a ?big lie.? He said his plan was not a tax credit but rather a permanent tax cut.

Washington County Supervisor Adam Mangold asked about the ?backfill? that is promised to local governments to make up for their lost revenue. Mangold said he was worried about what would happen to that backfill in the future when new representatives and senators are elected. Reynolds said that their tax plan contains a ?trigger? which would stop the tax cuts if the revenue projections were lower than a certain threshold.

Washington Councilor Bob Shepherd said legislation at the state and federal level can have unforeseen consequences for local governments.

?The Clean Water Act has hammered us,? Shepherd said. ?We?re years and years in debt for the good of everyone down stream.?

Branstad said he agreed the federal government?s mandates were too strict on matters relating to the environment.

Branstad said he was open to compromising on his plan with Senate Democrats such as Sen. Joe Bolkcom of Iowa City.

?We need the Senate Democrats? help on this,? he said. ?I?m willing to compromise with Sen. Bolkcom and provide some money for the earned income tax credit if we can get permanent property tax relief.?