Business agenda could stall in evenly split Legislature
1/9/2005 By CHARLES EMERICK, Courier Staff Writer
WATERLOO --- When the 81st Iowa General Assembly convenes Monday, it will have a nearly even divide between the two parties.
The Senate is evenly split at 25-25, and Republicans hold a 51-49 edge in the House. If Iowa's business leaders want the Legislature to resolve major issues this session, it will require cooperation between Democrats and Republicans.
However, during the Annual Business Legislative Forum held last week at the Five Sullivan Brothers Convention Center, Sen. Bill Dotzler, D-Waterloo, admitted he was skeptical about how much will be accomplished.
"We have a lot of ideas, but we're in conflict," he said.
Rep. Deborah Berry, D-Waterloo, added: "It's important to solve the issues and not have any gridlock." Main issues to address include funding the Iowa Values Fund and reforming the state's property tax system. The Legislature also will look into reworking Iowa's "bottle bill," repealing federal deductibility on state income taxes and increasing the tobacco tax 36 cents per pack.
Roadblocks are likely when the Legislature attempts to locate funding for the Iowa Values Fund, a key to economic growth in the state. Gov. Tom Vilsack said last week lawmakers need to find a source.
Whether or not to borrow through the sale of bonds drew debate from both sides at Tuesday's forum. Dotzler favored bonding, while Sen. Bob Brunkhorst, R. Waverly, said that is "not the way to go."
Dave Brasher, director of the National Federation of Independent Business' Iowa chapter, also opposes borrowing in an attempt to lure business expansion in the state.
"We simply don't believe state government is very good at picking economic winners and losers," he said in a release. "We don't like the idea of using the taxpayers' credit card for giveaways to larger businesses without also enacting pro-growth tax and regulatory reforms that will benefit all businesses working to create new jobs that help Iowa to grow."
But Sen. Jeff Danielson, D-Waterloo, said it is important lawmakers come to a conclusion.
"The values fund relies on leadership from the Cedar Valley," Danielson said. "If we can't deliver it or come up with something else, then shame on us."
Property tax reform also will bring debate during the session.
It is an issue that can no longer be ignored, said Ron Corbett, chairman of the Iowa Chamber Alliance. Iowa commercial and industrial business pay 29 percent of property taxes, more than in any other state.
"Removing some of this tax burden would help existing businesses grow and help attract prospective companies," Corbett said in a release.
One proposal --- by the Iowa League of Cities and the Iowa Association of Counties --- is a mixed bag, according to legislators. It calls for a 100 percent tax of assessed value on residential, business and agricultural buildings. A homeowner's exemption of 50 percent would be allowed on all owner-occupied homes.
But the proposal would allow local government to tax the value of land --- not buildings --- for nonprofit groups, according to Rep. Don Shoultz, D-Waterloo. Nonprofits like churches and private schools are now tax exempt.
"(Property tax) is a real serious problem that needs to be addressed," Dotzler said.
The possibility of eliminating taxpayers' right to deduct federal income taxes on their Iowa tax returns also will prove to be a difficult issue.
"Only four states allow it," said Rep. Bob Kressig, D-Cedar Falls. "Why are we still doing it? When are we going to change it?
"But there's a huge education process that is needed to understand this. That's my No. 1 concern with that," he added.
Two bills eliminating federal deductibility have been passed in the past. Both were vetoed, one by Gov. Vilsack and another by former Gov. Terry Branstad.
Charles Emerick can be contacted at (319) 291-1418 or firstname.lastname@example.org.