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Iowa lawmakers advance property tax overhaul proposal
Dozens of stakeholders remain ‘undecided’ as impacts analyzed
Mar. 26, 2025 7:39 pm, Updated: Mar. 27, 2025 10:01 am
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DES MOINES — Iowa House and Senate lawmakers Wednesday advanced statehouse Republicans’ proposal to “reboot” and drastically overhaul the state’s property tax system.
Lawmakers held legislative hearings on Senate Study Bill 1208 and House Study Bill 313. Dozens of stakeholders representing Iowa businesses, pork producers, builders and local taxing entities — from cites, counties and schools to hospitals and regional transit services — said they remain “undecided” on the 52-page proposal as they continue to study and analyze potential impacts from the myriad changes proposed.
The bills — among other provisions — would:
- Use state general fund dollars to provide about $400 million in school funding currently paid for with property taxes;
- Set a 2 percent annual growth limit on new tax revenue local governments can collect, excluding revenue from new construction;
- Provide each household a $25,000 homestead property tax exemption;
- Raise an existing property tax exemption for Iowa veterans to $7,000 from $4,000;
- Provide a property tax credit to Iowans 70 years old and older who make less than 350 percent of the federal poverty level;
- Phase out the state's "rollback" system for residential, commercial and industrial properties by 2030. The rollback rate, calculated each year, limits the amount of property taxes Iowans pay to a percentage of what their property is assessed.
The changes would be phased in over the next five years.
Statehouse Republicans said rising property tax costs were a recurring top concern brought up by voters while they campaigned ahead of the November 2024 general election. But mayors and lobbyists for Iowa cities and counties said the 2 percent revenue growth limitation included in the bill would not keep up with inflation or the costs to provide public safety and other essential services.
Rep. Bobby Kaufmann, R-Wilton, and Sen. Dan Dawson, R-Council Bluffs — who chair the tax-writing committees on Ways and Means in the Iowa House and Senate, respectively -- stressed the bill remains a work in progress, and said they’ll continue to gather feedback.
Kaufmann said he anticipates bringing the bill forward to the full House Ways and Means committee in two weeks.
“I have committed to moving slowly on this,” he said. “ … I'm sure we'll have a couple more weeks after that where we will then continue to solicit feedback and hopefully put forth an amendment that most of us can agree on.”
Both Democrats and Republicans on the House and Seante subcommittees signed on to move the bill forward.
“I will give credit for credit that's due, and that is a very bold change to our property tax code,” said Rep. Larry McBurney, D-Urbandale. “I think that there are a lot of things in here that are workable. There are concerns that I have in speaking with my city leaders and speaking with my school districts that I would like to see address. …
“But I do think that this is a good start, and I'm glad that we are taking a little bit slower than what we've seen in the past. Not ready to call it a property tax cut yet, because I don't think we've seen a true cut since we started doing this in 2013, but I am hopeful.”
Comments: (319) 398-8499; tom.barton@thegazette.com
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