A majority of Iowans favor Gov. Terry Branstad's ideas for cutting both commercial property taxes and taxes on corporations. But they are skeptical that he can achieve either, according to a new Iowa Poll by The Des Moines Register.
They might be right to be doubtful - both proposals face an uphill battle in the Iowa Legislature.
One of Branstad's centerpiece proposals
Fifty-six percent of Iowans favor this approach, while 36 percent oppose it and 8 percent are not sure.
Branstad's fellow Republicans in the House are leery of the casino tax hike, which would require casinos to pay about $190 million in extra taxes each year.
House Speaker Kraig Paulsen, R-Hiawatha, said of the casino tax hike: "I'm not ready to say yes or no today, but I know that will be a difficult thing to do."
Twenty executives from 11 gaming companies descended on Branstad Friday to lay out arguments for why such a tax increase is a bad idea. But Branstad has previously said he's willing to go up against the "army" of casino lobbyists.
Branstad wants to use the extra casino taxes to help make up for revenue lost by switching to a flat 6 percent corporate income tax rate from the existing tiered rates of 6 percent to 12 percent.
This would shrink state revenues by $136.2 million in fiscal year 2012 and by $223 million in fiscal year 2013, according to the nonpartisan Legislative Services Agency.
Separately, Branstad wants to reduce tax rates on commercial property. Again, it might make Iowa more attractive to business, but it would also mean lower revenue for cities, counties and schools.
The poll shows 53 percent of Iowans favor this approach; 41 percent oppose it and 6 percent are not sure.
Asked if a commercial property tax cut could realistically become law this session, Paulsen answered: "I know there's progress in the House, but we're still a ways away from a plan."
But he added: "I think for the first time in my nine years here the stars might actually might be lined up to do something relatively big and consequential on property taxes. I'm going to continue to be optimistic until I can't be anymore."
Other key pieces of Branstad's economic agenda, such as a makeover of the state's economic development agency into a private-public partnership, face an uncertain future in the Legislature as well.
Senate Majority Leader Michael Gronstal, D-Council Bluffs, declined to comment on the poll's findings on specific legislation.
He has repeatedly said Iowa's commercial property taxes are too high. But unless lawmakers come up with a strategy to replace local governments' lost revenue, the tax burden would simply shift from commercial businesses to residential homeowners and farmland owners, he said.
Gronstal, who has three casinos in his hometown, has also expressed doubt Branstad's plan to hike the casino tax to 36 percent will pass in the Legislature.
Meanwhile, Branstad hits the road Monday to discuss his plans for commercial property and corporate income tax cuts in cities across Iowa over the next three weeks.
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