Latest news with #SenateStudyBill1227
Yahoo
07-05-2025
- Business
- Yahoo
Senate panel hears feedback on latest version of Iowa property tax bill
Sen. Dan Dawson, R-Council Bluffs and Rep. Bobby Kaufmann, R-Wilton talk to reporters March 6, 2025 about their property tax proposal. The updated version of this package was discussed in a subcommittee meeting May 7. (Photo by Robin Opsahl/Iowa Capital Dispatch) The latest version of a property tax bill discussed by a Senate subcommittee Wednesday is still expected to go through changes before a floor vote — but Sen. Dan Dawson, R-Council Bluffs, said it's still a priority to pass legislation on the issue this year. Restraining property taxes for Iowans has been one of Republicans' priorities for the 2025 legislative session, with leaders saying it was the top issue GOP lawmakers heard about on the campaign trail in the 2024 election. Dawson and Rep. Bobby Kaufmann, R-Wilton, the Ways and Means Committee chairs in the Senate and House respectively, introduced their proposal making major changes to Iowa's property tax system in March as a way to address these concerns. The largest change proposed in Dawson and Kaufmann's bill was to change Iowa's local property tax system from the 'rollback' system of calculation to a 'revenue-restricted' system. 'Rollback' refers to how the state currently limits property tax growth, a system where only a portion of a residential property's value is subject to property taxes. There is a a 3% growth limit on the aggregate value of residential property in the state used to determine how much of a property's value can be taxed each year, which is used by the Iowa Department of Revenue sets the rollback rate. SUBSCRIBE: GET THE MORNING HEADLINES DELIVERED TO YOUR INBOX The legislative proposal would remove the rollback, potentially allowing for a higher rate of property value growth that would be taxable. To limit property tax increases, the GOP bill instead proposes capping most property tax levy rates to 2% each year and limiting how much in new tax revenues local governments can collect as a way to stop property taxes from rising. Senate Study Bill 1227, the property tax bill discussed in a subcommittee meeting Wednesday, includes these changes. However, it was adjusted from the previous bill to allow local governments to exceed the 2% levy rate growth during times of high inflation, allowing for up to 5% increases as determined by increases in the consumer price index (CPI). While Nate Ristow with the Iowa Taxpayers Association praised the legislation overall, he said he was concerned about allowing higher property tax rates based on CPI. Ristow suggested 'that there be some sort of clarification and incentive in there for communities that don't fully utilize the allowable levy increase.' Dustin Miller, representing the Iowa Chamber Alliance and some local government entities said localities are 'certainly open' to talking about changes to the CPI component of setting levy rate growth limits, but said it was important these changes do not negatively impact communities that are seeing significant growth and investment. 'We want to make sure that new growth language is correct, because I think that's important from a pro-growth standpoint,' What we don't want to do is penalize those communities that are growing, and then certainly we don't want to impinge any existing deals that are out there.' More changes will be added through an amendment brought up by Dawson Wednesday — he said the amendment will create a system to phase out the rollback through a 'hybrid model' for residential properties over a period of 10 years. Another major change to the bill will come in the homestead property tax exemption. While previous versions of the bill included a $25,000 and $50,000 exemption, Dawson said the new proposal will have a property tax exemption of 25% of a home's taxable value, up to $125,000. He said this change will address concerns some local governments brought up about how the flat tax exemptions could cause problems in certain communities based on how property values differ in rural and urban areas of the state. The homestead property tax exemption based on a percentage of a home's value will provide relief for Iowa homeowners without 'taking a lot of communities' property tax base and wiping (it) out unintentionally,' he said. 'I think this gets us pretty darn near close to the end of where the whole system reform lies at,' Dawson said. Other components of the bill include shifting $426 million in K-12 schools from property taxes to the state and a property tax freeze for seniors over age 70 who have incomes at 250% or less than the federal poverty level. Emily Piper with the Iowa Association of School Boards, said she was concerned about how the bill's proposal to shift some current school levies to the Secure an Advanced Vision for Education (SAVE) funding stream, in cases where schools have promised to fund certain projects through bond referendums but are not able to secure funding through the state. 'Using SAVE dollars to backfill more of those additional levy rate raises a concern, because it's open-ended,' Piper said. 'We don't understand how much is going to be going there, and we want to be certain if we're doing that, that we don't inadvertently negatively impact current bonds that are out there because the revenue is not as great as had been projected.' Dawson said many Iowa school districts have cash reserves that could be used to offset lost property tax revenue and move forward with infrastructure projects. Sen. Janet Petersen, D-Des Moines, said she was also concerned about this shift of education funding from local property taxes to the state in the context of the current state budget that draws on the Taxpayer Relief Fund and other reserves to make up for budget shortfalls. 'We need to proceed with caution when we say the state is going to pick up a portion of the tab (for) our schools,' Petersen said. ' So that's one area I'm really wanting to make sure that we're in a decent spot for that, so that our valuable growth and school budgets don't take a hit on that.' She said other parts of the bill, like the homestead tax credit, will 'moving in the right direction' on addressing high property tax costs,. 'This is more reform than it is relief, but I do believe it does maybe put in place some changes to formula and make it easier for Iowans to understand and predict,' Petersen said. While many agreed that changes to Iowa's property tax system were needed, some advocates and legislators have said moving on the bill during the 2025 legislative session may not be feasible. Mike Owen with Common Good Iowa, a progressive advocacy organization, said the group was registered against the bill before the amendment was introduced 'mainly because there wasn't enough time in this session to deal with something so big.' 'There still is not,' Owen said. '… We think it's good to have a new draft, but it would be best used for hearings that are helped throughout the state, throughout the summer and fall, to get a full range of views impacts of this legislation and deal with it next year.' Some legislative leaders, including Senate President Amy Sinclair and House Speaker Pat Grassley, have said they would like to move on property taxes this year, but have not committed to sending a bill to the governor in 2025. Sinclair said in April that Senate Republicans 'want it done right rather than fast.' Dawson said passing a property tax bill remains a priority before the session ends for the year. He agreed that the bill made major changes to the current system, but said these were necessary steps in order to provide substantive property tax relief to Iowans — while saying further adjustments will likely be made. 'We are trying to break the system apart and actually make this something that's more workable for all Iowans,' Dawson said. '… We have a duty to start acting for Iowans and start to reform the system.' SUPPORT: YOU MAKE OUR WORK POSSIBLE
Yahoo
09-04-2025
- Business
- Yahoo
Iowa Republicans release updated property tax legislation
Rep. Bobby Kauffman, R-Wilton, spoke at a subcommittee meeting Jan. 27, 2025. He and Sen. Dan Dawson, R-Council Bluffs introduced an updated version of their property tax proposal following public feedback on the bill. (Photo by Robin Opsahl/Iowa Capital Dispatch) An overhaul of Iowa's property tax system would begin sooner and allow local governments to collect more revenue in times of high inflation under updated legislation released Wednesday by the Republican chairmen of the Legislature's tax-writing committees. Senate Study Bill 1227, and its companion House Study Bill 328, make changes to House Study Bill 313 and Senate Study Bill 1208, the companion bills introduced in early March by Rep. Bobby Kaufmann, R-Wilton and Sen. Dan Dawson, R-Council Bluffs, the chairs of the Ways and Means committees in the House and Senate. The original legislation, as well as the updated version, would repeal Iowa's 'rollback' system for calculating property taxes, in which only a portion of residential property taxes are taxable. The taxable portion is a percentage of the property's market value, calculated each year growth of statewide taxable properties and limited by an aggregate value growth of 3%. The legislation replaces the rollback with a 'revenue-restricted' system by allowing taxation of the full assessed value of a property, but limiting the amount of new tax revenues local governments can collect. Most property tax levy rates could increase each year by no more than 2% under the bill, with exceptions for new construction. While the initial proposal phased out the rollback system over five years, the new bill proposes eliminating this system of calculation immediately, in fiscal year 2027. The new version of the legislation also allows local governments to exceed the 2% limit — allowing up to 5% increases for most property tax levy rates — during times of high inflation, as determined by increases in the consumer price index (CPI). In a news release, Dawson and Kaufmann stated the property tax proposal includes a 'minimum budget guarantee to provide small communities certainty in their budgeting process.' The measure also includes an increase to the homestead property tax exemption benefit from a proposed $25,000 in the initial bill to $50,000. Some of these changes — like allowing for greater levy rate increases during inflationary periods — were brought up during subcommittee meetings on the legislation by advocates representing local governments. Dawson said the new version of the legislation came out of discussions and suggestions on the original bill. 'When we filed our original bill, we were looking to get it out to the public so we could start receiving feedback and input, and the bill filed today is a result of that feedback,' Dawson said in the release. '… These updated proposals continue our goal of rebuilding the property tax system to bring relief, and bring more predictability and transparency to taxpayers, local governments and businesses.' Concerns about other portions of the proposal raised by local government representatives, like changes to tax increment financing (TIF) revenues and the shift of $426 million in K-12 schools from property taxes to the state, were not addressed by the amendment, remaining the same in the new legislation. The new property tax bill has not been scheduled for a subcommittee as of Wednesday. In interviews with reporters and at meetings, Kaufmann has repeatedly stated that his goal is for the measure to pass during the 2025 legislative session, while giving time for feedback and alterations as needed. Republican leaders have echoed this sentiment, while saying that they want to ensure the bill will have its intended impact of lowering property taxes while allowing local governments to continue providing needed services. Senate President Amy Sinclair told reporters earlier in August that 'we want it done right, rather than fast.' 'For me, it's a priority to get done this session,' Sinclair said. 'But if it doesn't get done this session, it's because … we didn't have all the details in place to get it done right. Kaufmann said in a statement on the updated property tax bill that the measure will provide needed relief from rising property tax costs. 'With assessment letters coming out, Iowans have been louder than ever with their concerns about property taxes,' Kaufmann said. 'Iowans have expressed their concern, rage, and fear about unpredictable increases and their ability to afford staying in their homes. We are working to provide real relief to Iowans and their families, make Iowa a competitive state to live, and deliver a property tax overhaul that focuses on property taxpayers.'
