This week, the Iowa House passed a proposal to protect Iowa taxpayers from the outrageous property tax increases, which have been overburdening Iowans for years. The House Republicans collected feedback from numerous parties, and our proposal, HF 718, addresses the concerns of both the taxpayer and local governments, who have the biggest stakes in property tax policy. A solution to the state’s egregious property tax increases is crucial in retaining current residents and attracting new residents to our great State.
By law, each Iowa school district is required yearly to levy a foundation property tax equal to $5.50 per $1,000 of assessed valuation on all taxable property in the school district. Our proposal reduces the school levy requirement from $5.40 to $4.40 and guarantees that the difference will be paid for out of the Taxpayer Relief Fund (TRF) that we created years ago to provide tax relief. This will deliver more than $200 million in immediate tax relief to Iowans while simultaneously ensuring that schools will continue to receive adequate funding.
Additionally, the bill caps annual property tax increases per parcel to 3% for residential and agricultural property and 8% for commercial and industrial property. This is on the actual amount of property taxes paid, not the assessment. Our proposal also increases transparency in the process by requiring that taxpayers are mailed notice of the dollar amount of the property tax due, the assessed value of their property, the effective property tax rate, the major reasons for any increase, and an itemized receipt including information on where their taxpayer dollars are going. This is to ensure that taxpayers have a clear picture of where their tax dollars are being spent, while also identifying which local taxing authority property owners should talk with if taxes continue to increase.
Some of the main concerns I heard from the people of House District 15 stemmed from a Senate proposal to limit voter-approved levies. Let me be clear – the House Republicans’ bill does not limit taxes levied as a result of a voter-approved levy or a debt service levy. Voter-approved levies like the Local Option Sales Tax (LOST) and Public Education and Recreation Levy (PERL) will continue to be allowed for the funding of projects that serve the community, for example the Missouri Valley Activity Learning Center, and other local needs.
The final piece of the House proposal moves all elections for bonding to the annual November Election date. The House Republicans are proud of our well-thought-out legislation, which garnered overwhelming support, moving through committee unanimously and passing off the House floor on Wednesday with a vote of 93-1. Our priority continues to be to fight for taxpayers and provide them certainty and sustainability. This legislation provides just that, and it is now in the Senate where negotiations will continue to try and find consensus before the end of session.