DES MOINES - Gov. Terry Branstad unveiled a budget proposal Tuesday that would substantially cut Iowa's commercial property taxes, saying it was time for the state to take "bold action" to attract businesses and create jobs.
Branstad's roughly $6.5 billion financial plan also attempts to limit property tax increases for residents, allocates new spending for education and establishes incentives to keep more medical school graduates in the state.
"Iowans are entering a period of unprecedented opportunity, and we in this chamber have it within our grasp to help foster this state's greatest economic expansion and quality of life improvement in modern history," Branstad said during his annual "Condition of the State" address.
Gov. Terry Branstad delivers the annual Condition of the State address before a joint session of the Iowa Legislature, Tuesday, at the Statehouse in Des Moines.
Branstad said his tax plan will cost $400 million over the next five years, the bulk of that going to commercial property tax cuts. His proposal would gradually reduce the taxable portion of a commercial property's value, so those owners would eventually pay taxes on just 80 percent of the assessed property value. The state would provide funding to local governments to make up any lost tax revenue.
"Our plan to reform and reduce property taxes is an investment in Iowa families and small businesses, but not at the expense of Iowa's local governments," Branstad said.
State lawmakers will assess the budget plan in the coming months. In previous years, the Republican governor has unsuccessfully sought commercial property tax cuts and education reforms. He is hoping that a more collaborative tone, coupled with new blood in the Legislature and a nearly $1 billion surplus might help the case for all his proposals, but response from lawmakers was mixed on Tuesday.