Iowa Gov. Kim Reynolds signed a bill into law Thursday that makes some changes to how cities and counties raise property taxes.
Cities and counties must inform residents that when property values increase as a whole, local officials could lower the property tax rate to bring in the exact same amount of money as the previous year.
If local officials need or want more money than the previous year, they must hold an additional public hearing before voting to raise taxes. And two-thirds of the city council or county board will have to approve any tax increases of more than 2 percent.
“This bill creates an additional public hearing prior to the approval of a city or county’s budget, allowing more public input and helping increase awareness and transparency to the budgeting process and Iowa taxpayers,” Reynolds said in a news release about the bill signing.
Republican leaders in the Iowa Legislature said addressing voters’ concerns about rising property taxes would be a main priority for the 2019 legislative session, which ended in late April. They ultimately introduced and approved this plan in the last days of the session, after rejecting earlier versions of the legislation.
Lucas Beenken, a lobbyist for the Iowa State Association of Counties, said he is disappointed that the state is interfering in local budget decisions.
“We think it’s unfortunate that the majority of the legislature and the governor appear to have a lack of trust in county supervisors who make decisions for the needs and desires of their counties,” Beenken said.
Beenken said local governments will have to work to educate taxpayers about the new process, and explain why counties bring in more revenue each year.
Democrats said this law infringes on local control and won’t do anything to reduce property taxes.
House Democrats claimed this will affect the state’s public pension program known as IPERS because that funding will be explicitly competing with money for other local services, possibly making spending on IPERS politically unpopular. Republicans dismissed that argument.