Reducing Property Taxes Could Be Costly For Others

By: Claire Kellett, Anchor/Reporter

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By Claire Kellett

Story Created: Jan 8, 2009 at 10:25 PM CST

Story Updated: Jan 9, 2009 at 10:38 PM CST

CEDAR RAPIDS - State lawmakers are trying to trim property taxes to attract more businesses and people to Iowa. While it would save money for people like commercial property owners, it could end up costing other groups, like even non-profit organizations.

The group says Iowa has significantly higher property taxes than its neighbors. In order to reduce those numbers, the group suggests giving cities and counties more authority to tax. That means local governments could impose things such as an income tax or a cigarette tax. It might even mean normally tax-exempt groups, like churches, could end up paying money.

Lively describes the type of music parishioners hear during Sunday services at New Covenant Bible Church in Cedar Rapids. Flat sums up the financial contributions the church is receiving during this tough economic time.

"Didn't budget that way. Didn't see that coming," says Business Manager John Maehl.

Maehl also didn't see the church spending thousands of dollars helping flood victims this fall during the Eight Days of Hope program. New Covenant is experiencing a drop in donations and unexpected expenses. Maehl says there's no viable money to give to local government.

"Is that money then we would not be able to use to provide meals, transportation or other services here in town?" says Maehl.

A group of state lawmakers studying property taxes says it understands financial concerns are at an all-time high but stresses property taxes here are too high. For non-profits, like churches, their contribution could be something like an individual agreement with a city or county to pay a certain amount of money.

"In the interest of recovery and bringing our communities back to the vitality before the flood, it is important that we allow cites to choose to diversity their revenues," says Representative Tyler Olson.

And therefore give local governments more control over generating revenue. But New Covenant Bible Church says its hard to help financially when you need help, too.

To really break down this recommendation, at least 75 percent of new money collected would go to property tax relief, mainly commercial property taxes. The other 25 percent would be used for things like disaster recovery, energy efficiency, and public safety. Again these are just recommendations to the Legislature right now.

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