Gov. Terry E. Branstad and Lt. Gov. Kim Reynolds today stressed that if their property tax plan is not implemented this year, Iowa taxpayers will be on the hook for a whopping $1.3 billion property tax increase over the next five years. This includes all classes of property: agricultural, residential, commercial and industrial.
"For far too long Iowa has placed an unneeded burden on small businesses," said Gov. Branstad. "A Main Street business in Iowa today pays more in property taxes than a business of the same size in midtown Manhattan or Chicago. With our plan, local communities will be compensated for the loss of revenue, while seeing increased revenues from new business locating in their communities."
Under the Branstad-Reynolds plan, new commercial property will be taxed at 60 percent of market value, while existing business will see their taxes decrease by 8 percent per year, over five years. Additionally, the state will provide $250 million to local government to compensate for loss of property tax revenue.
"This plan will send a strong message that Iowa is open for business," said Lt. Gov. Kim Reynolds. "Even with full implementation of our proposed plan, local governments will see $437 million in cumulative revenue increases. Lowering commercial and industrial property taxes will attract business, create jobs and increase family incomes statewide."
In addition to addressing Iowa's commercial property tax burden, the Branstad-Reynolds plan also protects residential and agricultural taxpayers by reducing the cap on state valuation growth from 4 percent to 2 percent. This change, by itself, will prevent more than $800 million of potential property tax increases for residential and agricultural property taxpayers over the next five years.