Branstad warns all tax cuts might not be possible

2011-02-08T04:30:00Z Branstad warns all tax cuts might not be possibleBy JAMES Q. LYNCH, Lee-Gazette Des Moines Bureau Waterloo Cedar Falls Courier

DES MOINES --- Gov. Terry Branstad warned lawmakers Monday the state may not be able to afford all of the tax cuts they want in addition to those he has proposed.

Branstad has proposed $450 million in relief for property taxpayers and to cut state corporate income taxes in half. House Republicans are moving forward with a 20 percent cut in personal income taxes that would cost the state $204 million the first year and more than $700 million the second year.

Speaking on The Exchange, an Iowa Public Radio public affairs program Monday, Branstad said he believes tax cuts are vital to the state's economic growth. A 10 percent tax cut when he was governor earlier was "helpful," Branstad said.

"But I don't think we can afford to do it all at this time," he said.

He prefers to work on lowering commercial property taxes that are paid on 100 percent of the value of the property and replacing Iowa's graduated corporate income tax with a flat 6 percent rate.

Then "with a growing economy, I think in future years we can well reduce both the property tax and also the individual income tax," Branstad said.

His warning is not likely to stop House Republicans from working on their 20 percent tax cut, Speaker Kraig Paulsen, R-Hiawatha, said.

"One thing we're unified on is that Iowans pay too many taxes," Paulsen said. "What we haven't resolved completely is whether we should address this tax first or that tax first. So we're going to get them up on the table and talk about them and at some point make a decision.

He said he thinks lawmakers have a heightened sensitivity to property tax relief, the 20 percent income tax cut is an easier bill to write than a property tax relief bill.

"We'll get this out of the way and get the property tax relief going," Paulsen said.

The House is expected to take up a school funding-related property tax bill today that calls for the state to pick up 100 percent of the cost of K-12 school aid by phasing out over seven years the property tax levies for schools other than the uniform $5.40 per $1,000 assessed valuation property tax levy.

House File 9 would shift about $400 million to $550 million in costs from property taxpayers to the state general fund via the school foundation formula, which currently divides K-12 district per-pupil costs by drawing 87.5 percent from the state and 12.5 percent from property taxpayers.

In the current budget year, state aid to support elementary and secondary schools totals slightly under $2.5 billion, while $676.4 million in revenue is generated by the uniform $5.40 per $1,000 assessed valuation on property and $573.4 million in additional levies that make up the 12.5 percent share.

Copyright 2015 Waterloo Cedar Falls Courier. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

(7) Comments

  1. BIL
    Report Abuse
    BIL - February 08, 2011 5:00 pm
    reojoe said: "No, wait a minute! If cutting taxes raises revenues, which is the republercan mantra today, why wouldn't he cut all of these taxes, if they will bring in more revenues?I'm confused..."

    My thoughts exactly. Why doesn't he eliminate ALL taxes, so that gov't revenue goes up to infinity???
  2. atrmods
    Report Abuse
    atrmods - February 08, 2011 1:11 pm
    Branstad gets a pay raise and we get nothing!!
  3. reojoe
    Report Abuse
    reojoe - February 08, 2011 10:27 am
    No, wait a minute! If cutting taxes raises revenues, which is the republercan mantra today, why wouldn't he cut ll of these taxes, if they will bring in more revenues?

    I'm confused...
  4. first amendment
    Report Abuse
    first amendment - February 08, 2011 10:04 am
    His plan all along had to be bully the state employees first to gain support from the public and then, once his "popularity" was at a fever pitch, hit the public with the fact that he can't deliver on what he said before.
  5. moosesaidit
    Report Abuse
    moosesaidit - February 08, 2011 7:48 am
    And so it begins - Branstad says one thing to get elected by the working class masses and now is doing another - Go figure! Still can't believe this state chose to step back in time by electing this guy! I'm just waiting for the state employee lay-offs to begin...
  6. first amendment
    Report Abuse
    first amendment - February 08, 2011 7:20 am
    12 years later...Branstad's true colors come out again!
  7. liveandlaugh
    Report Abuse
    liveandlaugh - February 08, 2011 5:01 am
    Typical Branstad, typical republican. Let's cut corporate taxes but we wont worry about the individual' NEWSFLASH If we keep more of our money we will buy more things and that is how the economy will grow!!
Add Comment
You must Login to comment.

Click here to get an account it's free and quick