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Iowa lawmakers send property tax relief bill to governor's desk

Sen. Dan Dawson and Rep. Bobby Kaufmann managed the passage of the property tax relief bill Tuesday.
Katarina Sostaric
Sen. Dan Dawson and Rep. Bobby Kaufmann managed the passage of the property tax relief bill Tuesday.

The Iowa Legislature voted nearly unanimously Tuesday to send a bill to the governor’s desk that aims to provide property tax relief for Iowans.

Republican leaders in the House and Senate reached an agreement Monday after passing competing property tax proposals last month.

Sen. Dan Dawson, R-Council Bluffs, said the bill will cut property taxes by at least $100 million and prevent massive spikes in Iowans’ tax bills when their new property valuations kick in next year.

“To our hardworking Iowans, I say this: the old days of local government getting an assessment windfall and leaving your levy rate the same are over,” he said. “If the valuations rise, your levy rate will fall.”

Dawson said he plans to do a lot more work on the property tax system in the years to come.

Sen. Pam Jochum, D-Dubuque, said she supports the bill because it provides relief to people who need it while also allowing local governments to provide essential services.

“After several years of tax cuts that benefited corporations and higher-income earners in Iowa, we are finally addressing a tax system that is one of the two more regressive taxes in our state tax code, and that is property taxes and sales tax,” she said.

The bill passed 49-0 in the Senate, and was debated in the House shortly after.

Rep. Bobby Kaufmann, R-Wilton, said the agreement is historic and represents the first phase of bold property tax relief.

“For all Iowa veterans who pay property taxes, this is a big deal,” he said. “For Iowa seniors who pay property taxes, this is a big deal. For all Iowans, the predictability and transparency that this bill brings is a big deal.”

Rep. Dave Jacoby, D-Coralville, said the bill doesn’t address all the issues he wants it to.

“But we’ve listened to the taxpayers of Iowa, we’ve listened to the property owners, we’ve listened to the lessees who are saying, ‘I can’t afford to live here if my property taxes go up astronomically,’” he said. “While we disagree on how we got there, I think we agree that this is a way to move forward.”

The House passed the bill 94-1, with Rep. Elinor Levin, D-Iowa City, the only no vote.

What’s in the bill?

The bill would limit how much revenue cities and counties can bring in through property taxes for the general levy, requiring some communities to lower their general property tax rates starting with property tax bills that are due in the fall of 2024.

If the total assessed value used to calculate taxes grows by 3 to 6%, that local government would be limited to 2% revenue growth for its general levy. If total assessed value increases by more than 6%, revenue growth for the general levy would be limited to 3%.

If local officials want to exceed those limits, they could put it up for a vote in their community.

Local governments that see less than a 3% increase in total assessed value would not have to lower their tax rates.

This part of the bill would last four years, and then the legislature could revisit the issue.

“We kind of agreed to come back, you know, and see how that works,” Dawson said. “Do we need to readjust it? Is there a better system out there? But at least it starts that process.”

The bill would consolidate some supplemental levies into the general levy, while leaving other levies out of the revenue growth cap.

It would also cut property taxes for veterans and seniors, and it would require local governments to provide more detailed information to taxpayers about how their property tax dollars are being used.

The bill would allow counties to raise some more revenue through certain fees.

It would also require bonding elections to be held at the same time as general elections.

The bill does not include House proposals to cap individual property tax bill growth at 3% and lower an education levy to provide more than $200 million in tax relief.

Katarina Sostaric is IPR's State Government Reporter