Legislators oppose road funding for State Troopers

Feb 3, 2010 — Creston News Advertiser

Larry Peterson

Feb. 2, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- Tax credits that could be instrumental in triggering a senior housing development at the former Iowana Hotel in Creston don't appear to be in jeopardy during a legislative review of state tax credits.

And, Gov. Chet Culver's proposal to use $50 million in road construction money to pay for the depleted Iowa State Patrol may not gather much support in the Statehouse.

Those were positions voiced Saturday morning during the Creston Chamber of Commerce legislative coffee at the restored Creston Depot.

Restoration of the vacant Iowana Hotel in uptown Creston relies on the tax-credit program. The project does have state historic tax credits and a $1 million Section 515 Loan through Rural Development that will carry over, but investors said it isn't enough money to proceed with restoration.

"The historic tax credit works in conjunction with the housing tax credit, and if you don't have the housing tax credit, there's not much you can do with the historic tax credit," explained Vern Hanson, co-president of the project's developer, MetroPlains LLC. "The key point is having the housing tax credit in place."

Mayor Warren Woods asked area legislators about reports that effectiveness of tax-credit programs meant to stimulate economic growth and job creation would be evaluated this session, and possibly reduced or eliminated. Under the most scrutiny is the film tax-credit program, after allegations of abuse last year that could lead to criminal charges. Three state economic development officials resigned or were fired.

"I know the tax credits are under fire, but I certainly hope they don't attack the tax credits that I hope we get for the Iowana Hotel project," Woods said. "That is an important project for the city of Creston and for the whole area."

A proposal by MetroPlains calls for development of 24 senior apartments in the historic hotel building.

"The House Ways and Means Committee will be considering various tax credits," said Rep. Mike Reasoner, D-Creston.

"After what happened with the film tax credit of this past year, most of the legislators are saying we need to take a look. Are they creating a business and investment of the local community?"

Reasoner said Gov. Chet Culver has called for $52 million in tax credits to be removed. Rep. Cecil Dolecheck, R-Mount Ayr, said useful tax credits such as housing credit for the Iowana shouldn't be affected by cutbacks.

"I think tax credits were intended to put something in place, a continued revenue stream and continued employment," Dolecheck said. "Something like the Iowana Hotel, a community project, probably is not in much danger of being shoved aside."

The State Patrol, meanwhile, is currently financed through the state's general fund, which pays for education, health care, environmental protection and other governmental programs. Culver wants to divert $50 million from the Road Use Tax Fund to pay for the State Patrol.

Reasoner, Dolecheck and Sen. Kim Reynolds, R-Osceola, were unanimous in their opposition to that plan during Saturday's public forum.

"It doesn't save taxpayers any money," Dolecheck said. "Basically, it's a shift. I think you're going to find a lot of opposition to that, within the majority party, too."

Reasoner concurred.

"In the last few years, county supervisors and city officials have been pleading for new revenue to be put into the Road Use Tax Fund for our roads and bridges," the Creston Democrat said. "If we fund the State Troopers out of that fund, that is $50 million less going to a road project. I'm not supportive of that. That fund is in trouble as it is, in that we are not getting enough revenue. Raising gas taxes has been a hard sell."

"The shift for the troopers shifts the burden back to the property taxpayers," Dolecheck added. "You still have the needs out there, so local governments end up with the shift."

"Those most impacted would be county governments and local property taxpayers," Reynolds added. "I believe it (road fund) should be fully funded."

Newstex ID: KRTB-0414-41760261