Questions and Concerns

Believe us; it isn’t because we love property taxes!

Actually, we feel for Iowans who can relate to what one of our members said: “Property taxes have become a ‘ball and chain’ around the property owner’s ankles and a burden beyond the ability to pay.”

After weeks talking about a property tax reform bill in the Iowa House that would create a city and county “transparency trigger,” we have heard some questions and comments:

What is a transparency trigger? In short, it is additional steps of required transparency that are triggered if a city or county proposes budget increases of more than two percent above the previous year’s, followed by a public hearing where citizens can weigh-in on the proposed budget, and then an affirmative vote by the council members or supervisors.
Will this proposal limit my property’s assessment? No. But isn’t your PROPERTY TAX BILL the real source of frustration? Increasing property tax bills are a direct result of a city’s or county’s budget. The assessor cannot lower a property owner’s tax bill, but it is within the ability of a city council member or a county supervisor to reduce the tax rate that impacts a city or county budget.
Will this have a crippling effect on city and county budgets? No. It simply requires local officials to have an open discussion with their citizens to increase their budget more than two percent from the previous year. If property tax growth in excess of two percent is explained and justified to local citizens, they likely would be supportive of their council or board of supervisors moving forward with a budget at the higher funding level.
Will my city and county be penalized for growing? No. New growth and improvements to existing properties do not count toward the two percent calculation for the transparency trigger.
Will this reduce local control of cities and counties? No. Under this legislation, the present rate cap is eliminated, and the only firm cap that exists is the two-percent allowable growth if the governing body cannot justify an increase above that to the citizens they represent. Budget and tax decisions would still be decided at the local level – city councils, county boards, and their voters.
What would happen to my tax bill? We modeled a small city that saw the assessed values of homes grow between 8 and 12 percent in a given year. Under our existing system that keeps property taxes on autopilot, those homeowners could have seen an increase in their property tax bills of a corresponding 8 to 12 percent. However, if the property tax cap ITR is proposing were in place, the increase in property taxes would only have ranged from 0.1 to 3.8 percent.