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School budgets, property tax relief keeping Iowa legislature in a deadlock

Iowa’s school districts’ operating budgets are the major roadblock preventing the end of the legislative session, Democrats said Thursday. While both sides of the aisle continue to negotiate and discuss how the state should budget, an unwillingness to compromise on Iowa schools’ allowable growth and property tax relief is keeping lawmakers in a deadlock.

Throughout the session, Senate Democrats have pushed for two percent allowable growth, which would come to a total of $65 million. Republican counterparts in the House have said no increase is needed. The ultimately approved percentage would be applied to the next two fiscal years, as leaders try to hash out a two year budget.

“I think this week’s report on revenues makes it clearer than ever the state can afford to provide for the basic education needs of the children in this state by doing two percent allowable growth,” Senate Majority Leader Mike Gronstal (D-Council Bluffs) said Thursday. “We continue to think that’s the single most important function of state government.”

Allowable growth is the percentage of increase within a school district’s operating budget based on cost of living; it is not actual state-allocated financial aid. If Republicans are able to push zero percent allowable growth through both bodies at the Capitol, it will be the first time there has been no increase, meaning district inflationary costs will be absorbed by the school district.

Up to 1,500 teachers in Iowa have been given lay-off notices in the last two weeks, according to Senate Democrats.

“There’s $900 million in the bank, and we’re just asking for $65 million,” Gronstal said. “We can afford to do this.”

On the other side of the aisle, Republican leaders said the roadblock to concluding the session will be agreeing on how to achieve property tax relief.

Speaker of the House Kraig Paulsen (R-Hiawatha) said both sides are actively talking about solutions to ease tax burden, but “we got a bridge to build there. Nothing’s changed in my mind with (Democrats) commitment to do something (also), and I think we have time to work on it.”

Paulsen said the House’s plan, which would create a taxpayer relief fund, provides “solid tax relief,” rather than dependency on tax credits on properties, like the Senate’s tax relief plan.

Gronstal was critical Thursday of the House’s tax relief approach in the proposed two-year budget, calling it the “largest residential property tax increase in the history of the state” that “targets Wall Street.”

Paulsen brushed off the criticism, replying, “That would be a rather significant overstatement. Look, we’re trying to find a way to lower (property taxes), we’re not looking for ways to raise them.”

In regards to allowable growth, Paulsen merely said Republicans “are at zero (percent). If nothing happens, then the matter is resolved; the code will not change.”

It is uncertain when the legislative session will close. Gronstal said the session will end “whenever we finish our work;” Paulsen said it was “possible, but not probable,” that lawmakers would be recessed as early as next week.

“I hope to have proposals in the early part of next week that will be ready for the bodies to look at with regard to property tax, mental health, and of course, the budget,” Paulsen said.

As House debates were suspended for the rest of this week starting Wednesday, many House legislators have gone home and will reconvene on Monday. The House switchboard will remain on throughout today. The Senate has adjourned for the week, and will open their switchboard again Monday morning.

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