Iowa Lawmaker Proposes Tax Breaks for Flood Victims

July 23, 2008

A Democratic state senator from Iowa who represents an area hit hard by record flooding is suggesting the state grant a one-year hiatus in property tax collections to regions most affected by the disaster.

“Some of the places that were really destroyed or devastated, maybe we ought not to make them pay any taxes this year,” said Sen. Tom Courtney, D-Burlington, a floor leader in his chamber. “Maybe we should give them a year off from paying taxes.”

A Republican leader agreed, and went a step further.

Senate Minority Leader Ron Wieck, R-Sioux City, suggested that the sales tax be suspended for the rest of the year to make it easier for residents to purchase materials needed for flood repair.

“There is going to be a tremendous amount of material purchased,” he said. “I think it would be great if the state suspended the sales tax until at least the end of the year.”

Wieck said because victims will be purchasing heavily to repair flood damage, sales tax collections are likely to spike and the state shouldn’t benefit from the disaster. No pricetag had been set for the suspension, Wieck said, adding that “we’ve got staff working on it.”

Wieck said his plan would apply to counties declared disasters.

Any changes would have to come as part of a package the Legislature could consider during a special session in September that’s looking increasingly likely.

Courtney said he represents a portion of the state hit hardest by this year’s flooding. Cities like Oakville in southeast Iowa were virtually destroyed when levees along rivers broke.

He believes that many homeowners will be displaced for at least a year.

“They ought not to have to pay that property tax if they can’t use the property for a year,” said Courtney.

He doesn’t have a pricetag for the plan, or all the details worked out, but he said the idea should go on the table for further talks.

Iowa Gov. Chet Culver has named a special commission to examine the damages from the widespread flooding last month, and their assessment is due Sept. 2. The governor has said it’s likely he will summon the Legislature back into special session once he gets that report.

Both the governor and legislative leaders have focused, in part, on property taxes in flood-battered areas that are due on Sept. 1, and delinquent at the end of the month.

“During any potential special session, there are a number of ideas that might be considered, and this is certainly one of them,” Culver spokesman Troy Price said in a statement. “However, Gov. Culver will look to the Rebuild Iowa Advisory Commission, to the affected communities, to the Legislature, and to our own assessments before making recommendations to the Legislature.”

Other items the governor has suggested that lawmakers could consider during a possible special session include eliminating the need for a local funding match for disaster relief programs, as well as easing restrictions on the issue of emergency funds held by some state agencies.

“It seems to me the Legislature could do something in some limited way to help (flood victims) ease that pain a little bit,” Courtney said. “If we think we can get something done, I think we should come back” for a special session.

Aides said Culver was heading to Washington to ask Congress for additional flood assistance.

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