(Des Moines) Governor Kim Reynolds has introduced a comprehensive property tax reform bill to the Iowa House and Senate that is projected to save Iowans $3 billion over six years.
Over the last two years, Iowans’ property taxes have gone up by an average of more than 10 percent, and are outpacing inflation, salaries, and the state’s population growth.
In order to curb rising property taxes, Governor Reynolds is proposing to cap local government revenue growth at two percent plus new construction on all taxing authorities except debt services and school funding.
“The rate at which property taxes are rising is unacceptable, and Iowans expect legislation that delivers meaningful relief to be passed this year,” Gov. Reynolds said. “Spending drives taxes, and because property taxes are driven by local government, the most reliable way to protect taxpayers is to limit local spending.”
Last fall, the governor hosted roundtable meetings with local officials and community leaders across the state to discuss ways to make local government more efficient. Some local governments have formalized agreements to share the cost and operations of specific public services such as law enforcement, public health, or waste management.
To encourage more communities to do the same, Gov. Reynolds is standing up a $10 million grant fund to assist local governments who choose to consolidate positions and pursue shared service agreements with neighboring cities and counties.
The bill also proposes to conduct property assessments every three years instead of every two years to protect families from sharp valuation increases and create more predictability and less volatility in the market. The governor’s plan also shifts the burden of appealing large property tax increases from homeowners to assessors who will have to justify them.
The bill also reforms Tax Increment Financing (TIF) districts to improve transparency and limit overuse, limiting TIF projects to public purposes for 20 years.
Additionally, Gov. Reynolds’ bill creates a property tax freeze for Iowans ages 65 and older with homes valued at $350,000 or less, improving affordability for seniors living on fixed incomes.
The bill also helps young Iowans who are hoping to buy a home for the first time. FirstHome Iowa Accounts, based on Iowa’s 529 Plan, will empower families to begin saving for a home years in advance, preparing sons, daughters, and grandchildren for homeownership right here in Iowa.
