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Panel OKs bill that would cut payments to local governments

A Republican-led panel in the Iowa House has approved a bill that would cut money from local governments. (MGN Online)

DES MOINES, Iowa (AP) -- A Republican-led panel in the Iowa House has approved a bill that would cut money from local governments.

A three-person committee advanced a bill Wednesday that would reduce a so-called "backfill" of money that goes annually to cities, counties and school districts. The payments were part of a 2013 law that cut property taxes in Iowa. It replaces reduced commercial and industrial property valuation.

Rep. Pat Grassley, a New Hartford Republican who chairs a key budget committee, says the state can't afford the payments, which are capped at $152 million annually. A similar bill has been introduced in the Republican-controlled Senate.

Opponents say many local governments would raise property taxes and reduce services, and that lawmakers would break a promise they made upon approving the measure.

Senate President Charles Schneider, a West Des Moines Republican, says the payments weren't supposed to last indefinitely.

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