DES MOINES (AP) — Gov. Terry Branstad has made clear that lowering commercial property taxes is a top budget priority this year, but lawmakers said Wednesday they also want to look at other types of tax relief.
Speaking at a legislative forum organized by the Associated Press, legislators said they want reductions to income taxes to be on the table as the state determines how to use a nearly $1 billion budget surplus. The legislative session kicks off Monday, with Branstad scheduled to unveil his budget plan Tuesday.
“We don't have a surplus, we have an overpayment by taxpayers,” said House Speaker Kraig Paulsen, R-Hiawatha. “I think some portion of that, if not a significant portion, should be returned to the taxpayers of the state.”
Senate Majority Leader Mike Gronstal, D-Council Bluffs, said he'd consider income tax cuts for some low-income Iowans. Branstad's budget director, David Roederer, said the governor's focus will be on lowering commercial property taxes — which he has lobbied for in the past — but that he will consider other proposals.
Besides tax reductions, Branstad is expected to propose substantial funding for an education reform effort that will likely focus on teacher attraction and retention.
House Democratic Leader Kevin McCarthy of Des Moines said he expects the education proposal to add about $177 million in spending to the roughly $6 billion budget. Lawmakers expressed support for education investments, but said they need to see the details of the governor's proposal.
“We're perhaps little bit, or at least I am speaking for myself, a little frustrated, that we haven't seen any of the details of the plan yet,” said Gronstal, adding he would like to see a focus on early literacy skills and access to community college.
Paulsen said he was interested in accountability and assessment tools for schools.
Another area of debate during budget negotiations will likely be Medicaid spending. Currently 400,000 people get the benefit in Iowa, but expanding the Medicaid rolls is part of President Barack Obama's health care overhaul law. Roederer expressed concern about the costs of adding to the program and said they still had questions about how the Affordable Care Act will work.
“I hope that we can have a good logical discussion about what is best for the state,” he said.
And it's not clear if the gas tax hike, which has been discussed in past years, will come up again. Roederer said the governor would only look at that issue this spring if something is passed by the Legislature. That tax hasn't be adjusted since 1989.
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