This week the House took action on the floor, sending our first bill to the governor – one that leaves more money in the pockets of Iowa taxpayers. Senate File 106 is referred to as the Internal Revenue Code Update bill. It updates Iowa income tax law and incorporates federal income tax changes enacted by Congress during the 2012 calendar year. If you’d like to read a full analysis of the bill, you can here.
Over the past couple of weeks, I have outlined a few ideas that House Republicans have rolled out in regards to tax relief. I continue to believe now is the time for serious and meaningful relief and to that end I have been pleased that House Republicans have been able to put several options on the table. One of the options that we have filed is House File 2, aimed at reducing Iowans’ property taxes.
Property tax reform and relief has been an issue that legislatures for the past decade have been struggling to fix. In order to make it easier to find resolution on a plan, House Republicans developed House File 2 – a simple and modest approach to begin with as a starting point.
House File 2
- Holds harmless property taxpayers anytime the state sets allowable growth funding.
- Eliminates additional property tax levies associated with allowable growth funding, reducing the share of money that is put on the backs of Iowa property taxpayers. On average, this would save Iowa taxpayers $2.70 per $1,000 in property valuation when fully implemented.
While tax credits run the risk of not being funded by future legislatures, this plan: is permanent, predictable, significant (at minimum $412 million in relief once fully implemented), does not shift between classes, and affects all classes of property.
When spread out across the state, about half of the savings goes to relief for homeowners and the other half goes to relief for employers. Overall, this would be about a 10 percent reduction in property taxes statewide.
Below is a chart that may help illustrate the plan for you – it uses the Linn Mar school district in as an example. You can visit here to find your local school district to see how it would be affected.
I would love to hear your thoughts on this plan and any other issue you may have – please feel free to contact me at email@example.com at my office at (515) 281-3521.
One last thing, last week I had a typo — Major General Tim Orr is the Adjutant General of the Iowa National Guard — my apologies for the error.