Iowa lawmakers: Sweeping property tax reform needed during 2026 legislative session

ALTOONA — With the start of the 2026 Iowa legislative session only about a month away, state lawmakers are gearing up to return to a debate on property tax relief, an issue they touched on but failed to advance a proposal for last year in the Republican-controlled Legislature.

It’s no secret that lawmakers have an appetite to address property taxes at the Iowa Capitol next month, as Gov. Kim Reynolds has toured the state for a series of roundtables with local leaders on the issue, and legislative leaders are teeing up proposals in each chamber.

Three lawmakers — Republican Rep. David Young of Van Meter, Democratic Rep. Larry McBureny of Urbandale and Democratic Sen. Bill Dotzler of Waterloo — extended that message Friday, stressing the need for property tax relief in Iowa. No key elements of any proposal have been released.

During a legislative panel at the annual Iowa Taxpayers’ Association Tax Symposium at the Prairie Meadows Casino in Altoona on Friday morning, the three lawmakers, who sit on committees overseeing tax policy in each chamber, were in agreement that the solution passed by lawmakers next year needs to be expansive rather than piecemeal.

Young, who chairs the Iowa House Commerce Committee and sits on the Ways and Means Committee, said property tax increases are by far the most common concern among his constituents. He said he wants to see the legislature take the time to craft an expansive proposal, but said it’s a “catch-22,” trying to balance it as a local issue with state-level reform.

“I want substantive reform, and I don't want to revisit this issue for a long time,” Young said. “It can be a really emotional issue at the doors. When you're talking to a couple on a fixed income, they're seniors, they've paid off their mortgage, they're living in their dream home, and it may not be an expensive home, and they're having trouble keeping up with their property taxes, and then that's just not right.”

McBurney, who worked on a House property tax proposal during the last session, said that while he wants to see significant property tax reform, he’s not sure the Legislature will be able to advance it in 2026.

“I think there's definitely an appetite for a large reform. And quite frankly, I would say there's an appetite on both sides of the aisle,” McBurney said. “No time during the process was I ever opposed to completely overhauling the system and starting back over from scratch to make it a more transparent process. I think, to me, that that is one of the biggest issues, is ensuring people know how to plan for their property taxes in the future as it stands right now.”

He added he is in favor of freezing property tax valuations for seniors 65 and older to ensure predictable taxes.

Dotzler, who will serve his 30th legislative session in 2026, said property tax reform has been an issue before lawmakers since he was first elected to the Iowa House in 1996, and he hopes to see bipartisan cooperation and a seat at the table for Democrats, as his party didn’t see last year’s proposal until the general public did.

“We need to have legislators that can be part of this process in the minority party," Dotzler said. "You don't hear about what's going to happen until you see the bill. That's no way to operate."

Reynolds told the Quad-City Times in November that she plans to introduce a property tax reform proposal at the beginning of the 2026 session, which begins Jan. 12.

Changes to TIF

The legislative panel agreed that while tax increment financing, or TIF, is an important tool that they don’t want to see go away, lawmakers need to consider placing guardrails on it to avoid unintended uses of funds.

TIF is a tool used by local governments to incentivize developers to build in certain areas, or TIF districts, by diverting property taxes on increases in property values to improvements in the district, including infrastructure.

During her property tax roundtable in Davenport, Reynolds said her office is looking at a 20-year sunset for TIF agreements.

Dotzler said the issue hit especially close to home in Waterloo, where, he said, the city used TIF dollars to offset city costs and said more accountability is needed for the tool.

“TIF is an important tool for cities and counties, and it's important that we make sure that they have that tool,” Dotzler said. “But I think there’s some things that the legislature can do to ensure that it's used in the way that it was really intended.”

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He also noted that high property taxes were a focal point of the recent election for Waterloo mayor, where a newcomer who focused his campaign on property taxes beat a longtime incumbent.

McBurney said he would support perpetuity being removed from TIF to avoid abuse.

“I don't think that any community should be in a position where they put a TIF district out there forever,” McBurney said. “I think TIF is an amazing tool to use. I think TIF has helped my community grow quite a bit, but I think it needs to be used correctly. Unfortunately, we've seen communities not use it correctly.”