This is the ‘hard cap’ vs. ‘soft cap’ difference delaying property tax deal
GOP legislative leaders see progress despite differences
DES MOINES, Iowa — Iowa Republican Statehouse leaders said they are optimistic about reaching a property tax reform deal, even as they continue to debate the issue four months into the legislative session.
House Republicans passed their own plan Thursday to change the property tax system instead of agreeing with the one Senate Republicans and Democrats passed earlier.
The debate has continued since the legislative session started in January. Statehouse Republicans started the process last year but could not reach a deal.
Hard cap versus soft cap
One of the biggest differences centers on hard cap versus soft cap.
House Republicans want to change the system so that local governments can only bring in a maximum of two percent more in property tax revenue each year. Senate Republicans want flexibility in case inflation is higher and prefer a soft cap.
“If there’s going to be a cap, there are hard caps in the bill, not based on certain inflators and other things. I know that’s a disagreement that we have. But you know, we’d love to have a conversation if maybe there’s a hybrid or a place in which we can negotiate that,” said Iowa Speaker of the House Pat Grassley.
Iowa Senate Majority Leader Mike Klimesh said differences remain but expressed optimism.
“There’s some differences yet. Let’s be honest, right? There’s some differences yet. You know, the Senate’s approach has always been to try to find a way to provide property tax relief for homeowners in the state of Iowa. We also understand that, you know, Iowa has the worst bridges in the country. Our infrastructure dollars aren’t stretching as far as they as they once did,” Klimesh said.
Key differences between plans
The Senate version includes an increase in the gas tax of what would likely be one cent per gallon per year to help communities pay for road and bridge improvements.
The Senate plan also includes additional tax breaks for seniors and a tax increase on multi-residential dwellings.
The House version does not have those three things and instead gives all homeowners a break by assessing no property taxes on the first $15,000 of value of a home.
Both leaders said they expect a deal before lawmakers go home for the year.
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