Property tax bill should reform assessments

Republicans who chair the Ways and Means committees in the Iowa House and Senate have rolled out a third version of their plan to make big changes the property tax system that funds local government but has also spawned taxpayer outrage.

Much of the discussion has swirled around its major provisions.

The latest version, Senate Study Bill 1227, slows down the phaseout of the property tax rollback system to 10 years, not the original five-year target. The new legislation would now offer taxpayers an exemption equal to 25% of a home’s assessed value, up to $125,000.

And the current bill would cap tax growth at 2 percent, which would significantly reduce local spending on services. The bill would also allow the state to take over $426 million in K-12 school funding now covered by property taxes.

And although a go-slow approach to the complex bill was first favored by lawmakers, it’s now possible backers may try to get the bill passed as the Legislature winds down the 2025 session, likely this week.

“I think that this is darn near close to threading that needle between small communities, large communities, property poor, property rich, not having a one-size-fits-all approach to this … which I think really is going to help us drive and reform the system in the end,” Dawson said during a recent legislative hearing.

While all the attention is focused on those major issues, we think one property tax issue should be addressed in the plan. And that’s how assessors calculate the market value of a home.

Property is reassessed every odd numbered year. And when an assessor decides on a property’s value, they look at the previous year’s sales. It’s a system that can result in a jolting rise in property tax value.

We’d like to see an index of multiple years of sales be used to determine value. It likely would lead to fairer judgment of property values than using one year.

As for the larger bill, we’d still like to see discussions carry on through the interim and into the 2026 legislative session before such a far-reaching bill is rushed to passage. The sometimes-chaotic ending of a session is not a good time to debate and approve a bill affecting taxpayers and local governments.

This is a bill that should be debated in daylight with ample time to offer amendments that can improve it and for stakeholders to gauge its affects.

(319) 398-8262; editorial@thegazette.com