When your home state is repeatedly rated as one of the worst in the country for property tax burdens, something has to change. When you are consistently hearing from Iowans worried about property taxes year after year, something has to change. And when the same entities complaining about funding are spending money on things like hosting bird watching events and costly electric garbage trucks, something has to change. This was the mindset of legislators as we headed into session this year, determined to make real change in the lives of Iowa taxpayers, bring relief to Iowa families, and encourage fiscal responsibility to the communities that need it.
Iowa has been rated as the tenth worst state in the United States in property taxes, even after we had spent years chipping away at the system to bring relief and reform to Iowans. We had passed bills to help update property tax statements, increase transparency, consolidate and cap levy rates, and update the property tax code. While calls for reform continued from Iowans, we knew we needed something bigger and bolder. We spent the last two years talking with city officials, county officials, agriculture groups, schools – all the stakeholders who have an interest in Iowa’s property tax system. Our goal was always simple: how can we bring relief to Iowa homeowners? They are the ones we are hearing from that property taxes are too high, they’re unaffordable, and they are worried about being able to stay in their homes.
This year, the legislature passed and the governor signed into law Senate File 2472, a historic property tax relief bill to help rein in local government spending, give cities and counties flexibility to support their communities, and most importantly, bring relief to Iowa homeowners. We ensured when property inflation goes up more than 2 percent, the levy rate goes down. We also increased the tax credit for elderly and disabled Iowans and gave a ten percent discount on taxable value for all homeowners. With these new limits and reforms in place, this new law is estimated to provide over four billion dollars in property tax relief over the next six years.
Throughout this conversation, we heard a lot about local services. Local services are important and a critical part of our communities. Property taxes affect services Iowans use every day, like roads, law enforcement and emergency services. However, as we started discussing property tax reform, we learned a lot about what cities and counties are spending their money on: annual Christmas decorations, pay increases for supervisors, sustainability directors and climate programs, diversity coordinators, and drone shows just to name a few. And its these same entities who, while giving special incentives to a few at the expense of the many, are putting up a fight against the four billion dollars in relief the legislature just delivered in our bill.
For years, the legislature has focused on responsible budgeting, cutting waste, and focusing on important priorities. We are asking cities and counties to do the same thing, and the same thing Iowa families are doing – budgeting for the essentials and investing in priorities. Additionally, if cities and counties do need additional dollars, they can make their case to their communities and put it to a vote of the people.
Senate File 2472 puts the focus back on the homeowner, and back on the priorities. Citizens across the country are celebrating 250 years of American independence and greatness this year. It’s a great reminder of what the vision for our country was and what we continue to aspire to every day – life, liberty and the pursuit of happiness. We want homeownership to continue to be a part of the American dream, help build up a stronger Iowa, and continue making Iowa the best place to live in the country. The bill we passed this year puts Iowa families first, pursues making homeownership more affordable again and helps ensure families have the best tax environment in the state. Over the last decade, we have tackled the income tax, cutting income taxes down to a flat 3.8 percent. We’ve eliminated taxes on retirement income, brought relief to small businesses, and helped ease the tax burden on Iowa farmers. The bill passed this year was the next step to making Iowa an even more affordable place for families, retirees and small businesses. We will continue to build on these successes so Iowa can be a place for anyone to chase their American dream.