IFP Statement: Iowa Tax Negotiations

Property-tax package combines EITC boost with challenges to local services

IOWA CITY, Iowa (May 16, 2013) — The nonpartisan Iowa Fiscal Partnership today released the following statement from Peter Fisher about the Iowa House-Senate conference committee report on SF295. This is the legislation that wraps property tax changes into a package that includes several other items, including an expansion of the Earned Income Tax Credit (EITC). Our statement:

It’s Christmas for Walmart and McDonald’s, which will happily receive property-tax breaks that they don’t need, while their low-wage employees receive a better Earned Income Tax Credit.

This Christmas tree will grow bigger with each passing year, leaving less room in local budgets to respond to needs. The EITC expansion is important to working families — including 37 percent of all Iowa kids — but in the balance of who benefits from this package, it is a very small ornament.

If there is any question as to who benefits, Iowans should note that the EITC boost will be $35 million when fully phased in, compared to about 10 times that for property owners.

As we noted last month, the only justification for dealing with commercial property taxes was a political one. It has never been based on either an economic or competitive need to cut commercial property taxes in Iowa. So we have a politically derived package that will meet the demonstrated need to improve the EITC but leaves open new challenges to the support of critical public services in our state.

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Peter Fisher is research director of the Iowa Policy Project (IPP) and recently co-authored a report with IPP research associate Heather Gibney about the competing property-tax proposals being considered by lawmakers.

The Iowa Fiscal Partnership is a joint public policy analysis initiative of two nonpartisan, nonprofit Iowa-based organizations, IPP in Iowa City and the Child & Family Policy Center in Des Moines. Reports are at


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