DES MOINES - Cities and counties should be allowed to tap new revenue sources if a major share of the proceeds were used to reduce property taxes, a legislative study panel concluded Wednesday.

The Legislative Property Tax Study Committee recommended the 83rd General Assembly explore giving local officials the ability to impose income surtaxes and a number of fees and alternative revenue options to ease the tax burden on property owners, particularly for commercial property tax relief.

Under the revenue diversification option, at least 75 percent of the new money collected would be used to reduce property taxes, with two-thirds to go toward lowering commercial rates and the remainder to reduced taxes on other classes of property. The rest of the new revenue could be used for public safety, disaster recovery, infrastructure or energy efficiency.

Lawmakers who were the panel's voting members also supported considering an expenditure limitation component for local governments.

"I think there's general consensus in the Legislature that we have to move in a new direction as far as how we fund our local government," said Rep. Tyler Olson, D-Cedar Rapids.

Rep. Douglas Struyk, R-Council Bluffs, the lone dissenter, said the recommendations amounted to a tax shift with no guarantee of dollar-for-dollar tax relief for property owners.

If the panel's ideas were to become law, Struyk said, Iowans likely would see a slight reduction in commercial and residential property taxes but a very large increase in their individual income taxes without a consolidation or reduction in the cost of providing local services.

Committee co-chairman Sen. Joe Bolkcom, D-Iowa City, praised the panel for offering viable remedies to long-standing tax inequities.

"Iowa's current property tax system is a disaster," he said. "This is a billion dollar problem that has been more than 30 years in the making. Today, thanks to help from people all over the state, we are offering solutions."

Contact Rod Boshart at

newsroom@wcfcourier.com.