Taxing issues are taxing Iowa legislators' patience. We're questioning chairmen of the legislature's tax writing committees, Iowa City democratic Senator Joe Bolkcom and Wapello republican Representative Tom Sands on this edition of Iowa Press.
Borg: This year's legislative session is already two weeks past its scheduled adjournment. One of the major sticking points is an impasse over a proposal reducing commercial and industrial property taxes, some say by as much as 40% over the next five years. That worries municipal and county government officials across the state. They are depending heavily on that property tax revenue stream. Today we're getting perspective from the chairmen of the legislature's revenue raising ways and means committees, republican Tom Sands in the republican controlled House and democrat Joe Bolkcom in the Senate. Gentlemen, welcome back to Iowa Press.
Sands: Thank you, it's good to be here.
Borg: Talking money today.
Bolkcom: Thanks, Dean.
Borg: Across the Iowa Press table the AP's Mike Glover and Radio Iowa's Kay Henderson.
Glover: Senator Bolkcom, let's start with you. I know this is a show that's all about money but we're going to call it audible here and go to another issue. The Senate was more or less consumed by the abortion issue this past week, efforts to block a proposed clinic in Council Bluffs. How are you going to resolve that?
Bolkcom: Well, the Senate yesterday passed a bill that would address two concerns that we have heard. One is establishment of a new free-standing late-term abortion clinic in Council Bluffs and the other is having in place a system of care for the mom and this potential newborn, a level of care available in case something goes wrong when one of those abortions occurs. So, we presented a bill essentially that would require a certificate of need for any new surgical facility providing late-term abortions but those facilities would have to be located next to a neonatal hospital that could provide the kind of emergency care should that procedure go wrong in an outpatient setting.
Glover: You did resolve that issue.
Bolkcom: We have not resolved it. Those two issues we have heard repeatedly, we think this legislation addresses that. We hope to come back Monday and conclude work on this bill. These are extremely rare procedures. In 2009 only six late-term abortions were performed in Iowa all at one hospital. These are pregnancies that something has gone terribly wrong and the woman and families have to make critical decisions about whether they are going to be able to take that pregnancy to term. In all of these cases the families want a good, healthy baby to result and I think it's important that we don't put politicians and the government in the doctor's exam room with the patient. I think the families can make these decisions better than we can.
Glover: Representative Sands, this came out of the Senate ways and means committee so I assume you'll be involved in the House. Is there interest on the House side in dealing with this issue?
Sands: Everything that I'm hearing that this bill addresses is not, does not go far enough to address the concerns that we have been hearing, it does not stop late-term abortion. I understand the need of placing it next to a hospital for the welfare of the mother. However, I think it's pretty lame to say that you're worried about the welfare of the unborn child if you're about to take that unborn child's life. So, I believe the bill that the House sent over is necessary because we need to end this late-term abortion in Iowa period.
Henderson: Let's talk, oh ...
Bolkcom: I would just say, I mean, the House bill we believe is unconstitutional. The United States Supreme Court said states can't ban abortions of possibly viable fetuses before 24 weeks, this would ban it at 20 weeks. This would take away the exception for rape and incest. It would also say that a pregnant mom who had a serious complication would have to be in danger of substantial and irreversible harm, near death before an abortion would be able to be performed. These are decisions that doctors and moms and families ought to make, not the government and certainly not politicians.
Henderson: Representative Sands, you asked to make a decision on an abortion related issue this past week as well. One of your colleagues, Representative Pearson, was hoping to bring up an outright ban on all abortions in Iowa, not just those post-20 weeks of pregnancy. How did you vote on that? Tell the viewers. And number two, doesn't that expose sort of a rift among republicans about an approach to this issue?
Sands: I voted no on the rule suspension to bring up the bill that dealt with an out-and-out ban on all abortions. I am pro-life, believe abortion is personally shouldn't be a choice and it's a bad choice for people to make mainly because we are talking about the unborn life of a child and somebody needs to stand up for that unborn child. I didn't believe that that day was the day to debate that particular bill, going around procedure like that. I understand the importance that has for many, many republicans as well but the focus this year really needs to be on this late-term abortion bill because there is an immediate need out there that needs to be addressed. So, that was -- the focus has been there with the Iowa republicans or the House republicans. On the rift, I don't know that there's a rift going on inside the Iowa House. There's certainly some differences of opinion but my wife and I have differences of opinion as well and we work them out. So, there's not a deep divide or a deep rift going on in the House republicans.
Henderson: Senator Bolkcom, there appears to be some sort of a difference of opinion, maybe not a rift, among Senate democrats as well. Two of your democratic colleagues joined with republicans in trying to advance the bill which has already cleared the House which would ban abortions after the 20th week of pregnancy. How are democrats dealing with a difference of opinion?
Bolkcom: We feel that all our members are free to bring their ideas to our caucus and free to represent their constituents, that's what this job is about. The proposal we have presented I think has the support of our entire caucus. We all agree that preventing a late-term abortion free-standing clinic in Council Bluffs is the right thing to do and we think this legislation will accomplish that. What the House republicans have presented is an extreme position on number one, the desire to ban all abortions but even these late-term abortions. These are -- when these late-term abortions happen there are families and moms that fully intended to have a healthy pregnancy and a healthy baby and something goes terribly wrong and these families are interacting with their physicians whether they be cancer docs or cardiologists, neonatal specialists to try and figure out how to have a safe delivery. In some cases, and in 2009 there were only six of these, those families had to have those abortions. And who would want to make a decision for that family? We should leave that decision to them.
Glover: Senator Bolkcom, we've heard you express the views of democrats who are running the Senate, we've heard Representative Sands express the views of republicans who are running the House. Isn't that a recipe for doing nothing this year?
Bolkcom: Well, we -- I think that there's more than one issue surrounding this and obviously people feel strongly about it. I think there's great agreement on trying to keep a new free-standing, late-term abortion clinic out of Council Bluffs, Iowa. We've presented a bill to do that. I recognize that they would like to do more but I think we can all agree to getting something done at least to solve part of the issues that we both are concerned about.
Glover: Representative Sands, same question to you. Isn't this a recipe for simply not doing anything? You won't take up the bill they have proposed to try to block the clinic in Council Bluffs, you want a more sweeping thing that they won't debate. Isn't that a recipe for just not doing anything?
Sands: It's a recipe for doing less this session for sure. Doing nothing I don't think would be completely accurate.
Glover: What can you do?
Sands: On the late-term abortion I guess I need to understand how ending an unborn child's life at that stage that actually could, would be best in the womb but could still survive outside that womb and the painful ...
Glover: Representative Sands, I understand where you're coming from, you're talking about the merits of the issue and I'm not. I'm talking about what we're going to end up with and it sounds to me, from what the two of you are saying, is that you're not going to agree on anything.
Sands: I would certainly hope that that is not the case.
Glover: Then tell me what you can agree on.
Sands: Well, we can agree on that there shouldn't be late-term abortion in Iowa and it shouldn't just not be in Council Bluffs, it should not happen anywhere in the state.
Glover: I don't think Senator Bolkcom and democrats in the Senate agree with that.
Sands: Well, there's two that are and if we can get them, get more to agree then we can still come out with something, especially as the session closes down and negotiations go on.
Bolkcom: Well, I don't think Senate democrats are going to pass an unconstitutional bill and cause the state to spend a bunch of money on lawyers and defending it. We don't think that makes sense. We do think there is agreement on this issue of having a free-standing, late-term abortion clinic open in Council Bluffs, Iowa. We have presented a plan and a policy to deal with that.
Glover: That they won't debate.
Bolkcom: That they won't debate and as we have heard the debate over the last couple of months that has been the repeated issue that we have heard from Iowans from Right to Life and from republicans throughout the legislature. I get that they want more but can't we agree to at least get this accomplished.
Borg: It seems to be that this almost is a microcosm, this program, of what is going on in the legislature. We've just spent half a program talking about abortion that we had really planned to be a tax issue program. But my question to you, Senator Bolkcom, isn't this, just like this program, crowding out other issues because you have spent an inordinate amount of time in the legislature haggling over this?
Bolkcom: I don't think there was much of a campaign during this last political cycle talking about this issue and spending the time. We got sent back to the statehouse to do job creation and get this economy going again. There's been far too little of that coming out of this General Assembly. That said, we have presented a series of proposals around that, that I hope we can get back to not only in this show but when we get back to the Capitol in the next few days.
Henderson: Gentlemen, let's talk about property tax reform, property tax relief. The Iowa Senate has passed a bill which would extent commercial property tax relief to small business owners. The Iowa House this past week passed a property tax relief bill that is geared to commercial property tax owners, it also deals a little bit with residential and ag land, it also deals with the way schools are financed through property taxes. Let's let you two sort of negotiate this before the viewers. Representative Sands, is there anything in the Senate passed bill that you see as acceptable to the House?
Sands: Well, I think one thing for sure is that the Senate obviously recognizes that the commercial property owner out there is in an inequitable position so they are addressing that with the property tax credits. Property tax credits certainly is one avenue to do that. It would hold cities and counties harmless. I think one of the things we have heard from people across this state is all levels of government are spending too much money and so I think cities and counties have to have a little skin in the game as well but not to the extent that they're not able to supply the services that they are needing to do out there for people and I don't believe the legislature on either side of the aisle or either side of the rotunda wants to put cities or counties in that position.
Henderson: But specifically the tax credit they proposed you are not going to embrace?
Sands: We certainly have not yet at this time and one reason is because on a property tax issue that is very complex it just adds one more layer to that complexity. We have went down the road that we did and believe it's a little more easier to understand and to do.
Henderson: Senator Bolkcom, sort of the same question to you. Are there components of the House passed property tax plan that Senate democrats would accept?
Bolkcom: Well, we agree, as Representative Sands said, that we should do something on this issue. We think our proposal is a better proposal. It targets small businesses, we pay for it, it has the support of cities, counties and school boards because we do pay for it. The republican proposal is targeted at larger businesses, 40% of whom are out-of-state taxpayers that we'd give this massive cut to and it will result in a major shift from commercial property taxpayers to residential taxpayers. In our caucus we don't believe that's the right approach, we don't believe that that is fair to simply shift a major burden from commercial property taxpayers to residential payers.
Glover: Representative Sands, let's go to you. It sounds to me in this issue, like the issue we just finished talking about, abortion, that you're not going to do anything. You're going to end up with the House in one place and the Senate in another place. Won't voters punish the legislature if you come to gridlock on this and other issues?
Sands: I believe that the voters would punish both sides of the aisle if they simply do nothing and come to gridlock. We do have a Governor in the Executive Branch that is interested in doing something on property taxes as well. I think we are in a position right at the moment both sides of the rotunda that we have both laid out our plans, there are ways to work through that, there are a lot of moving parts. The one thing that our continued message has been is House republicans have no interest in raising property taxes on any Iowan out there. We have an interest in lowering property taxes and we can accomplish that by the school piece that is in our bill.
Glover: Senator Bolkcom, same question to you. It sounds to me like the democrats who run the House and the republicans who run the Senate simply aren't going to agree on this just like you aren't going to agree on what to do about abortion or late-term clinics, that sort of stuff. Are you running the risk that voters are going to say there's gridlock at the statehouse, a pox on all their houses, let's punish all of them?
Bolkcom: Well, certainly there is that risk. When I'm done with this session I think there is some opportunity to find a third way, if you will, but we do have some differences. Their proposal is largely geared to providing the majority of the benefit to large commercial industrial property taxpayers. Ours is not. Ours, criticize it if you will, is focused on small businesses. 83% of all commercial property taxpayers under our plan when this is fully phased in will pay as if they are paying residential rates. In Louisa County, Tom's county, 94% of commercial properties will be taxed at residential rates. We think that is a good deal. Our proposal also targets the money directly to the taxpayer, gives the money to the taxpayer. Their proposals give the money to the local governments. We think that over time, one of the criticisms of both of us, has been the legislature doesn't follow through and make good on these wonderful things that are out ...
Glover: What I'm hearing you do is what I accused Representative Sands of doing a bit earlier, you're talking about the merits of the issue and I'm not. I'm talking about what you're going to be able to get done and it doesn't sound to be like you're going to be able to get anything done.
Bolkcom: Well, part of this show I think is to educate Iowans about what is at stake, there are differences of opinion, legitimate, to try and educate folks about what is on the table here. And so that's kind of how I answered the question.
Borg: Representative Sands, I'm going to give you a chance to answer some fears here. First of all, the fear of cities, towns and schools that you're cutting off a revenue stream that is not going to be replaced. That is a lifeline for them right now. Also, Senator Bolkcom says, this will shift property tax load from commercial to residential. Are those fears not justified?
Sands: Well, if I was in local government, I certainly served on city council seven years before I was in the legislature so I understand the city budget fairly well and their concerns. But here is what happens if nothing is done, is we are in the second year of a run of the shift going to residential and ag land right now because of the rollback. We are at a low in the mid to upper 40s on residential, that will end up somewhere most likely at 50%, 58% or 60% of assessed value. So, that shift to residential and ag land is occurring right now, has already started and will continue to happen if nothing is done. That's why it's important with some of the safeguards that we have got in our bill that slows the shift from a four percent cap presently in Iowa law to a two percent cap so it slows that rollback and by picking up more of the school funding, which happens to be anywhere from 40% to 60% of a property taxpayer's bill, that offsets any increase that might come ...
Borg: The state would pick up the funding for schools, more for schools and take it off property tax.
Sands: More of it, yes. Right.
Glover: Representative Sands, the question was put to me like this, this past week, I'd like to put it to you. What you're essentially asking is you're going to raise my property taxes so you can cut Kum & Go's property taxes?
Sands: No. And here's why is because when you look at the property taxpayer, let's take you, for instance, not only do you pay city property taxes but you also pay property taxes that go to the K-12 school system, there's community colleges, there's non-rural county, there's a lot of different levies but the big one for a city resident is schools first and then cities. Where I live it's 60% of my property taxes go to schools so that's why it is so important to keep that school funding piece in there because that will lower your property taxes.
Glover: Senator Bolkcom, what is wrong with that argument that you're going to raise my property taxes so you can cut Kum & Go's?
Bolkcom: I don't think there's anything wrong with that argument. I think whoever asked you that question has sized this up well. The difference between these proposals are ours is focused on small business job growth and small business, theirs is focused on big business. We pay for our proposal, $200 million over the four years, they don't. Ours has the support of cities, counties, schools, theirs does not. Ours will create jobs, I think theirs will actually result in job loss.
Henderson: Talking about the job creation angle, democrats are criticized on that particular tenet of the plan in that a small business that gets a few thousand dollars in a property tax credit is not going to have the financial resources to even hire a person let alone five or six.
Bolkcom: We think small businesses having more money in their pockets to potentially hire more people but to basically invest more money in their local communities is a terrific investment and one worth making. The big businesses that will be the largest benefactors of the House proposal, Wal-Mart $7 million tax cut statewide. They probably don't pay much taxes right now in Iowa. A lot of these bigger companies that will get these benefits have lobbyists, have associations, have tax policy on the income tax side of the ledger, the sales tax side of the ledger but provide substantial benefits paying no income taxes and the property taxes are where they do support the schools and do support local services. Their proposal to set those aside will have the big guys shifting all of the costs that are in the system to the little guy and we are opposed to that.
Henderson: Senator Sands, I mean Representative Sands, I apologize, let's address the concern that you've sort of touched on but let's put a finer point on it. You two may promise to put more state money into local schools this year but that promise may not be made by legislators in the future, you two may not be in the legislature. And therein lies the problem for cities, school districts, they don't trust you.
Sands: And I certainly understand that and am trying to figure out other ways to actually lock that up into the future. First of all, our plan does not favor big business because we're talking about a property tax that is a class and we're treating all commercial classes the same. Our local nursing home is locally owned and pays $30,000 in property taxes a year and that is certainly not a big chain across the plan or across the state and it's something they could benefit from. So, ours is not trying to pick winners and losers from big or small business or big or small commercial but actually trying to address the problem that exists out there today.
Glover: Senator Bolkcom, isn't what is needed here really a step back, comprehensive look at Iowa's tax system? And isn't that impossible to ask of a legislature as deeply divided as this one is?
Bolkcom: I think it's a challenge. I think we come ideologically from different places, we stand more with smaller businesses and working people and the people trying to make ends meet. I think the republicans are more with the wealthy and the bigger businesses. I mean, it has showed up in the Governor's veto of the earned income tax credit, tax cut for 240,000 working Iowans making $45,000 or less. We passed it, we had agreement in the House and the Governor vetoed it. At the same time we signed a bill that gave about $14 million to the wealthiest Iowans so they could take advantage of all of their itemized deductions. We have seen the difference already play out this session and so, yeah, I think it's a challenge for us to make substantial change.
Glover: You have seen the differences. What is needed is probably a comprehensive overhaul of the state's tax system, the way it pays for government services. But isn't that impossible in a legislature that is, you two have made clear, so deeply divided?
Sands: It certainly is very difficult when you have the two opposing views of the ways and means chairs of the House and the Senate, Senator Bolkcom coming from very liberal Johnson County and myself coming from a very conservative, rural, southeast Iowa County. It obviously is very -- there is a very different opposing views that we have. But, yes, you are exactly right, Mike, that it is time for an overall comprehensive review of Iowa's tax system and it's not just property taxes, it's income as well and how that is best delivered.
Glover: But that's not going to happen, right?
Sands: It's not going to happen in the next two to three weeks but property taxes still have a chance.
Borg: I'm going to ask the last question here, we're running out of time. Are you going to have a budget in place by July 1st? Because if you don't, what happens to state government?
Sands: We are going to have a budget in place and the sooner the better as far as House republicans are concerned. A couple of months ago the House republicans and the Senate democrats were about $130 million apart. The House republicans have moved up $101 million and the Senate democrats seem to run higher.
Borg: So, you're coming together. Senator Bolkcom?
Bolkcom: I think it's a challenge. The Governor seems like a wind up doll of campaign slogans and he has continued to just simply, in both public and private settings as negotiations have taken place, not been able to compromise and come together. Governing is about finding the middle ground and working with it and we continue to hear our way or the highway and we have work to do. I sure hope, Dean, that we can get done by July 1st.
Borg: I have to take the highway right now. Thanks for being with us. A reminder that the Internet is your direct connection to our Iowa Press staff, the address is on the screen right now, it is email@example.com. We're back next week at the usual times, 7:30 Friday night and 11:30 Sunday morning. I'm Dean Borg. Thanks for joining us today.