From Rep. John Wills’ newsletter:
I have talked about property tax reform a few times this year and Thursday morning at 3:00 am, the Iowa House passed a historic bill that simply requires communication on how property taxes are calculated and explained to the common taxpayer.
The bill that was passed out of the House and sent to the Governor has several main points to it that will protect and keep taxpayers informed. The bill deals with several topics including:
- Deciding how much to levy,
- Transparency,
- Dates to certify budgets,
- More publication of the budget changes,
- Absolutely does not affect IPERS or any retirement or benefits levy,
- And does not change any levy caps or combine any levies.
In deciding how much to levy, cities and counties currently have various levies and some of those are capped and some are not. This bill does nothing to cap or uncap any levies. The process starts with the local government receiving any new assessments, such as those that many of you have received already this spring. Then based on these new values, all levies are adjusted up or down to represent a rate that would bring in the same amount of tax revenue as the prior year. This is the “effective rate”. The local government can then decide if this is the correct amount of tax to levy or if more or less is necessary.
The transparency part of this bill states that the local government must publish a notice and have a hearing on what the updated levies will be. If the proposed levies bring in tax revenue that is an increase of 2 percent or less the local government must vote to approve by a simple majority. If the proposed levies bring in tax revenue that is an increase of more than two percent a 2/3 majority must vote to pass it.
After the resolution on the new levies has passed the local government needs to publish a notice of the budget they intend to pass, and the same voting requirements apply. All of the information from the notices needs to be published on all local government websites and social media presences.
Because of this new process, the date to certify budgets will move from March 15 to March 31 for local governments in order to give them time to meet the new requirements. In addition, the bill provides for a process in the new law to object to a budget if a group of citizens feels the increase is egregious.
The new law does not change anything in regard to IPERS or retirement programs that our local governments operate. These systems are mandated by the state. Local governments are required to fund retirement benefits.
There were many people who were using IPERS as a scare tactic in an attempt to kill this bill which provides taxpayers with more transparency. This fear mongering is not right and needlessly spreads fear and discontent for some of our state’s citizens. Once again, the Iowa Legislature did the hard right over the easy wrong and voted to protect our taxpayers by providing increased communication and truth in taxation.
Finally, this bill keeps the current property tax system that we have today in place. The bill does not change, combine, or cap any levies. This is important as the opponents of this bill tried to tie some change in this code as a back door method to hurt or destroy IPERS or the 411 retirement system. Since the fund these retirement plans are located is are not capped, they simply cannot compete with other sources of funds.
I am willing to talk to you about this bill to provide further information that might help you with this bill. The bill that I have outlined above took over four months of listening to you and local government officials to arrive at. This is an important bill for Iowa and continues the work that has led Iowa to be one of the best states in the nation. I appreciate representing you and bringing our NW Iowa values to the concrete of Des Moines.
