A Historic Week for Property Taxpayers

This week was a historic week for Iowa property owners as the House passed House File 2274, a bill that delivers significant tax relief and genuine reform to all classes of Iowa’s property taxpayers.

The following are the remarks that I made on the bill:

I rise today in strong support of House File 2274, legislation that provides genuine property tax relief to all Iowans.

First, I want to thank the House Ways and Means Committee and Chairman Tom Sands for their tireless effort in crafting a commonsense solution to one of Iowa’s most complicated and growing problems. The legislation before you is a product every member of this chamber can and should proudly support.

As I said in my opening day remarks, now is the time for real and substantial property tax reform. Today, Iowa has one of the highest commercial property tax rates in the nation. It also has some of the highest residential property taxes in the nation.

Over the last ten years, the amount of property taxes paid by Iowa residents has increased by 1.75 billion dollars. Local budgets have grown as much as 74 percent during this time. If we do nothing – which regrettably I believe some are comfortable with –but if we do nothing, Iowans are projected to be saddled with an additional $2.5 billion in property taxes over the next ten years. Iowa’s families and employers cannot – and should not – put up with such dramatic increases.

Plain and simple, Iowa’s growing property tax burden is stalling job growth and consuming family budgets. The rollback has turned into the roll-up and the burden on homeowners is growing at a faster rate than what their incomes are growing.

According to the non-partisan Legislative Services Agency fiscal bureau, the legislation before you will reduce Iowans property tax burden by 1.2 billion dollars across all classes of property. Specifically, homeowners will see their property taxes cut by over 400 million dollars. Our new and improved plan puts an emphasis on small main street employers by accelerating their tax relief as well.

Let me be clear, the plan before you is the only plan that has been proposed that will reduce property taxes for all Iowans.

Our pro-growth, pro-jobs plan creates predictability and certainty for Iowa families and employers. We are signaling to job creators that Iowa’s property tax system is competitive and they can move to hire Iowans by expanding or locating here without fear of looming tax increases.

Right now, surrounding states are considering changes to their codes to compete and put Iowa at a further disadvantage. Missouri and Kansas have bills pending to eliminate income taxes and North Dakota is contemplating eliminating property taxes. We cannot stand idly by while neighboring states plot to lure our jobs, businesses and families away.

Now is the time for action. Now is the time to pass House File 2274.

Opponents of our approach falsely claim local governments will be forced to make draconian budget cuts and shift more of the burden to residential property taxpayers. These claims are not accurate and I know of no one in this chamber who wishes harm on our communities.

For those of you who are more concerned with protecting local government budgets than property taxpayers, read the non-partisan LSA analysis. Under our plan, revenues to local governments will continue to grow, by approximately 2.3 percent compounded per year, or 1.3 billion dollars. This projection takes into consideration nothing more than the policies outlined in this bill. It does not factor in the new revenue local governments will realize as businesses locate and expand – so the doom and gloom scenarios do not exist.

Let me also say this. Once again this body is proving we are ready to make serious progress on this issue. We have worked with the governor – we look forward to action from the Iowa Senate. In House File 2274 we have incorporated Senate concepts and have been sensitive to their expressed concerns.

So let’s do a status update:
House File 691 is sitting in the Senate (the original House proposal from last year)
Senate File522 is sitting in the Senate (the original Senate file from last year)
Amendment H-1716 is sitting in the Senate (the House compromise plan from last year)
And now we’re debating House File 2274, a third House compromise plan

The last point I will make is this. Simply voting no and standing on the sideline will cause one of the largest tax increases in this state’s history.

Make no mistake: a no vote is a vote against providing Iowa homeowners with a 417 million dollar property tax cut.

A no vote is a vote against providing Iowa’s main street employers with a 602 million dollar property tax cut.

A no vote is a vote against providing Iowans with over 1.2 billion in property tax relief.

I would bet; and in fact I know, because I’ve read a lot of postcards that go out each fall, nearly every one of us have said we’d support, fight for, and work on creating a better economy, create jobs and reduce property taxes. This is your opportunity. This bill is the opportunity to follow through on promises we have made to Iowans.

I urge my colleagues to put the hardworking taxpayers of Iowa first and cast your vote in favor of House File 2274.

House File 2274 passed, 59 to 39 and is now available for the Senate to take up, debate, amend or send to the governor.

Feel free to contact me regarding this or any issue – my office phone is (515) 281-3521 or email is kraig.paulsen@legis.state.ia.us