There was much fanfare last year when the Legislature passed and Gov. Terry Branstad signed a bill designed to help expand broadband access.
The goal, Branstad said, is “connecting every acre of Iowa to high-speed broadband.”
But companies trying to expand said they’re concerned because a key part of the law is not formally in effect and could hinder how they plan expansion projects.
It’s business the governor and Legislature should attend to in quick order.
A story from The Associated Press reported that the issue is a 10-year property tax exemption for service providers who build out broadband — AKA the high-speed Internet that many city dwellers consider part of their everyday life. Businesses depend on it; for some, it is crucial to their livelihood. Schools use it, for example, to offer courses so students don’t have to go long distances, or to bring cutting-edge education into classrooms. And in our personal lives, we use it for everything from sending emails and watching movies to real-time communication with our loved ones in far-away places.
In short, we’d be lost without it.
But more than six months after the law was signed into effect, providers that would like to expand their broadband services are waiting for the Iowa Department of Revenue to write rules so they can apply for the exemption. Service providers can seek tax relief up to two years out, but some say they would like a faster return on their investment, which just makes good business sense.
For example, one company, Premier Communications in northwest Iowa, has spent about $4.4 million to build service in three rural areas. Doug Boone, CEO, said his next budget includes $8 million for continued built-out but he’s holding back because of the uncertainty of the property tax relief program.
Unfortunately, that uncertainty could linger too long while the situation works its way through the different departments of state government.
Department of Revenue spokeswoman Victoria Daniels said the agency will provide a draft of rules soon but finalizing them may take months. Her office, she said, has to work with the Office of the Chief Information Officer, which must determine if a provider’s new project falls under the definition of limited broadband service.
“This is state government. Things do not happen overnight, unfortunately,” she said.
Chief Information Officer Robert von Wolffradt said his office is working on the situation and understands providers’ frustrations, but noted his office has had limited time and no direct state funding to do the work. Branstad’s new budget proposal contains $2 million for the broadband program but how it is to be spent is not specified.
So it’s possible that providers might be forced to pay full taxes on property that was supposed to be exempt in 2016.
We understand providers’ frustration and uncertainty. We also understand that new state programs don’t happen overnight, as Daniels said.
But it’s important for Iowa’s economic, educational and quality of life purposes for high-speed Internet to be offered across every acre. Thus we urge the state, starting with the governor, to make implementing the new law a high-speed priority.