Meaningful Property Tax Reform on the Move

SpeakerKP42

I believe we had a productive week of work in the House. We saw movement on several pieces of the budget, completed a public hearing on the Healthy Iowa Plan, saw progress on education reform and most importantly, moved meaningful property tax reform.

If no action is taken on property tax relief, the hardworking taxpayers of Iowa are staring down the barrel of a $2.6 billion property tax increase over the next 10 years, with the majority of that increase resulting in increases to homeowners.

The House proposal does not shift the tax burden to various classes of property, but instead ensures that relief and reform is permanent, predictable, significant, and affects all classes of property.

Generally, the bill:

  • Contains a 20% rollback of taxable value on commercial and industrial property.
  • Assessment growth limitation moves from 4% to 2% on ag and residential taxes immediately, while keeping the ag & residential tie in effect.
  • After the 20% commercial rollback is fully implemented, all three classes of property (Ag, Residential, and Commercial) are tied together with a 2% assessment growth limitation.
  • Includes an appropriation created to backfill loss to local governments.
  • Raises the school foundation formula from 87.5% to 95% over four years which provides dollar for dollar property tax relief.

Property tax reform affects Iowa’s economy and the lack of it is an impediment to putting people back to work. Our uncompetitive property tax system is a burden on job creators and prohibits businesses of all sizes from expanding, hiring or even settling on Iowa. I have heard from many of my neighbors and small business owners in eastern Iowa — the time for action is now. I remain committed to real relief that will affect all Iowans.

The bill passed the House with bipartisan support, 54 to 45, and was sent back to the Senate for their consideration.

I look forward to making more progress next week. In the meantime, if you have questions or concerns please feel free to contact me at my office – 515-281-3521 or by email at kraig.paulsen@legis.iowa.gov.

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