Letter to the Editor: Property Tax Reform puts family budgets first

If you’ve picked up an Iowa paper in your community or spoken to a local elected official, you may think the sky is falling on local budgets due to the passage of the 2023 property tax bill. While the bill did increase spending restraints on local governments, cities and counties will generally continue to see the same or more revenue for their budgets in future years as they are at present.

House File 718, which was signed into law in April, attempts to bend down levy rates into the future while making no drastic cuts in the present. Communities seeing less growth may continue to have unchanged levy rates, while communities with faster growth must lower their levy rates when growth exceeds certain thresholds allowed within the bill, unless they are under the $8.10 levy cap in Iowa code. Essentially, as taxable values rise in a community, levy rates must fall if growth exceeds three percent, preventing local elected leaders from riding a windfall of new property tax revenue with assessment increases.

Newton City Administrator Matt Muckler, in an August interview with the Newton Daily News, said the new law “… covers the most important things residents rely on … It covers the core services our residents expect us to deliver. That’s what they’re cutting.”

Contrary to Muckler’s commentary, few cities, if any, will see any reduction in year-over-year revenue under the new law. The new law does not provide immediate property tax relief to anyone except veterans and members of the 65+ population. The new law, rather, bends the growth curve down in city property tax collections, providing long-term property tax relief for all Iowans.

Of note, House File 718 made no changes to the Trust and Agency Fund, the portion of property taxes that pays for city and county worker benefits. Employee benefits are not subject to cities’ $8.10 cap, only wages and other perks like transportation allowances or gym memberships. While it is unlikely that anyone will see a city position lost due to the adoption of this year’s property tax bill, it is possible that some cities may opt to eliminate positions through attrition or slow merit-based salary increases.

Complaints from city and county leaders across the state prove that House File 718 is working. In many cases, local elected officials are being forced to take a critical look at city budgeting for the first time in a very long time. The decisions city leaders are being forced to make under the new law are not dissimilar from the tough choices Iowa families make every day when looking at their personal finances. Cities are being forced to live within their means, and as we all know from our own family finances, that can be tough.

Governor Reynolds and the Iowa Legislature should be commended for putting property taxpayers first and preventing local elected officials from further pinching family budgets by taking even more money from their wallets.

Victoria Sinclair

Government Relations Director for Iowans for Tax Relief