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Historic Property Tax Cut Heading to Governor Branstad
CEDAR RAPIDS, IA (CBS 2/FOX 28)--
A historic, statewide property tax cuts appears to be a done deal this evening.
After five months of wrangling between senate democrats and house republicans, a tax cut package is headed to Governor Branstad's office.
The new tax credits are something some property owners say they've been waiting to see the state do for more than 20 years.
"It reduces our operating expense and over the long run it's going to reduce the rents,” said Dick Rehman, former president of Landlords of Linn County.
The bill, supporters say, encourages economic development by lowering the market value of commercial buildings, like apartment complexes.
When the value is reduced, the tax property owners have to pay also reduces.
It’s a great idea, but cities like Cedar Rapids depend on those taxes.
“If you're going to reduce someone else's taxes that’s going to make up for that and we wanted to make sure that it wasn't local property tax owners,” Mayor Ron Corbett of Cedar Rapids.
Over two years, the tax will drop by ten percent, which will also reduce income for city services, like police and school districts all of whom depend on property taxes.
Cities bought off on the plan, only after the state agreed to make up any shortfall.
"They’ve committed to doing that but long term we're always concerned that maybe the legislature in the future may renege on that promise,” Corbett said.
While cities want a permanent fix, the state only committed to two years and for property owners, that's enough.
"We're very thankful to governor Branstad and to the legislature for really facing the task and this problem head on,” Rehman said.
The governor asked for the cuts, so it's unlikely he won't sign it, but there's also no promise landlords will pass their savings on to their tenants because that's not part of the bill.