The 85th Iowa General Assembly was gaveled into session January 14. Budget issues and property taxes are top items on the agenda as legislators begin the 2013 session. Farmers and agricultural organizations will be watching carefully to make sure they don't get caught in the crossfire of commercial property tax reform. Governor Branstad and many state lawmakers agree that commercial property taxes are too high in Iowa and they want to lower them. But there is strong disagreement over the best way to reduce commercial property taxes without harming local governments or raising property taxes on residential or ag property.
"We don't want to see a shift in property taxes that would end up putting a heavier burden on farmers," says Matt Steinfeldt, state policy advisor for the Iowa Farm Bureau Federation. Ag leaders are concerned the change might eliminate or alter the present productivity formula used to calculate taxes on agricultural land.
With increases in production and the recent jump in rural land values, ag property taxes are going to gradually rise anyway. Some lawmakers suggest that the state might choose to slowly phase in a program that would shift more of the weight of funding for education and schools to the state government, so education could be funded by something other than local property taxes. "We'll first have to see what the lawmakers decide on the commercial property tax piece of the puzzle," says Steinfeldt.
Budget surplus, water quality, fuel tax and improving the state's roads and bridges
What other issues will the Iowa legislature likely deal with in 2013? The state this year has a budget surplus because tax revenues have been high, thanks in part to a strong ag economy. Lawmakers will debate how to spend the money. Some state government departments and agencies that have been underfunded in recent years are asking for increases. Also, some of the budget surplus could be used to fund one-time expenditures or it could be used to help pay for fixing the commercial property tax situation. Of course, everyone wants a part of the surplus.