The Iowa Senate inched closer to reaching an agreement on the budget today after passing four spending bills. However, budget negotiations continue with perhaps the toughest battle yet to come.

House file 697, the omnibus budget bill, passed the Iowa House on June 8 but is currently under review by a Senate Appropriations Subcommittee. The bill still has several steps to go before it can be sent to Gov. Terry Branstand.

Property tax relief remains a hot issue with Democrats and Republicans offering highly different approaches. Property taxes help to pay for community services such as schools, police and fire departments and local infrastructures. Currently in Iowa, commercial property is taxed at 100 percent of the property’s assessed value. Both parties agree this is high for the Midwest.

Gov. Branstad’s initial plan for property tax relief would lower commercial property taxes to 60 percent of the property’s assessed value. However, House Republicans propsed a plan that would lower commercial property taxes to 75 percent of the assessed value of the property.

The plan released by Senate Democrats would create a tax credit that would tax the commercial property of small businesses at the same rate as residential property. Residential property is taxed at 50 percent of its assessed value.

Property tax relief remains of the issues that has yet to be negotiated before a budget deal can be reached. The fiscal year ends on June 30 and without an agreement the state government will shut down.

Gov. Branstad’s office continues to insist that there will be no government shutdown. No contingency plan exists if a shutdown would occur.

Iowa State University would not be affected by the shutdown because there will be no shutdown, said Ellen Rasmussen, associate vice president for Budget and Planning for the Executive Vice President and Provost office at Iowa State. 

“There is no indication of a shutdown,” insisted Rasmussen.

The Iowa Legislature adjourned at 11:28 Friday morning for the weekend. It will reconvene Monday June 27 with the hopes of reaching a budget agreement.