Iowa lawmakers want to reduce property taxes — but how?

DES MOINES — State lawmakers are determined to lower Iowans’ property taxes, and this year several legislative proposals have surfaced:

Capping increases in property assessments. Limiting local property tax levy rates. More and stronger requirements before a school district can ask voters for permission to sell bonds for an infrastructure project.

All of those proposals and more are floating through the Capitol, and lawmakers are hearing from Iowans and organizations about the impacts each proposal might have.

Ultimately, lawmakers will need to reach an agreement between majority Republicans in the Iowa House and Senate, plus Gov. Kim Reynolds, before any proposal can become law. With so many varied proposals making the rounds, that could take a while.

Rep. Bobby Kaufmann, a Republican from Wilton who chairs the House’s tax policy committee, expressed confidence that some sort of property tax policy will get done this year. “Our overall goal continues to remain that whatever is in our legislation, the goal is to lower people’s property taxes,” Kaufmann said Monday.

Kaufmann and Rep. Dave Jacoby, the top Democrat on the House’s tax policy committee, spoke to reporters Monday after a legislative hearing on House Republicans’ proposed property tax bill, House File 1.

That legislation would reduce the property tax levy built into state public school funding, cap annual property assessment increases at 3 percent and require school districts to provide a down payment of 10 percent of a project’s cost and notify every property taxpayer in the district when asking the public to support bonding for a building project.

At Monday’s hearing, Kaufmann and House legislators heard concerns from groups representing Iowa’s public schools; cities, counties and assessors; and even some groups that advocate for lower tax policies.

“Other states that have tried (capping assessments) will show that they simply don’t acquire the success that they’re intended to,” said Tom Sands, executive director of the Iowa Taxpayers Association and a former state legislator and chair of the House tax policy committee.

Dave Daughton, with the School Administrators of Iowa, said the required 10 percent down payment on a school bonding project would be “fiscally, very difficult” for schools.

“As a former superintendent, I can tell you the decision to have a bond issue is not made casually,” Daughton said.

Meantime, Iowa Sen. Dan Dawson, a Republican from Council Bluffs who chairs the Senate’s tax policy committee, late last week introduced a series of proposals addressing tax policy, including property taxes. The legislation takes a mostly different approach to property tax law changes than do House Republicans’ bills.

While Dawson’s bills would, like the House bill, cap assessment increases at 3 percent, the Senate bills also would cap cities’ and counties’ general property tax levies and reduces the value at which properties are assessed.

“Iowans have told us their property taxes are too high, and they want a better seat at the table,” Dawson said. “We have to be very thoughtful about our system, to make sure that the system actually works for the property taxpayer.”

Dawson said he expects the Senate’s property tax bills, Senate Study Bills 1124 and 1125, will soon be scheduled for their initial legislative hearings.

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