Thursday, May 23, 2013

What Did We Win?

While state-level Democrats are claiming victory in the long-fought property tax bill, here in Johnson County we're wondering what exactly it was that Democrats got out of the deal.

The massive package of tax credits, rollbacks and reductions includes benefits for residential and commercial property owners, state income-tax payers and low-income workers. It will reduce property taxes statewide by billions of dollars over the next decade, while rebating hundreds of millions more through a new income tax credit and an expansion of the earned income tax credit for the poor.

The earned income credit, long a critical issue for Iowa City senator Joe Bolkcom. looks like the only tangible "progressive" item in the bill, and is dwarfed by the commercial property tax cuts. The deal was bad enough that Bolkcom. along with Coralville's Bob Dvorsky, were two of the six No votes on final passage.

An updated fiscal analysis released Wednesday by the nonpartisan Legislative Services Agency estimated the total property tax reduction at $3.87 billion statewide over 10 years. The state’s general fund will provide $3.13 billion to local governments to offset that loss, leaving an estimated $741.1 million reduction to be absorbed by cities, counties, school districts and other jurisdictions.

"If you hear anyone say counties and cities will receive a backfill of lost revenue, it is only partially true and will only be partly true if the state always keeps its word," said Supervisor Janelle Rettig, estimating that over the next ten years Johnson County's total annual loss will be $2.1 million and Iowa City $3.3 million. "Cuts in local programming, services, roads will happen even with a partial backfill. Also increases in residential taxes will happen. There was a way to do this thoughtfully and fairly and this isn't it."

It's not the first time over the years that we've seen this move, where the Legislature and governor - usually but not always Branstad - kick the can down the road, specifically a county secondary road.

"They decided to give away local government tax revenue, not their own," said Johnson County supervisor Rod Sullivan. "Now Iowa's cities and counties get to cut services so a bunch more of our money can flow to Bentonville, Arkansas."

As I write, early Thursday morning, the Senate has adjourned for the session. The Republican led House is yet to vote but nearly certain to approve. Meantime, Democratic legislators, especially those seeking higher office, need to be ready for the question: what did we win?

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